IDC Research Report: Firewall Appliance Market

Cisco and WatchGuard Are the Companies to Watch in the Firewall Appliance Market.

According to market research firm International Data Corporation (IDC, Framingham, Mass.), Cisco and WatchGuard are the companies to watch in the fast-growing firewall appliance market. Cisco dominates the high-end price band of the firewall appliance market. In the low-end price band, however, WatchGuard rules.

Over the next five years IDC predicts firewall appliance revenues will grow at 51 percent compounded annually to more than $1.4 billion. The firewall market contains a diverse selection of vendors and it will become even more competitive. Currently, Cisco leads the market followed by Check Point/Nokia and WatchGuard. RadGuard and Lucent are the remaining two vendors in the top five.

"While Cisco dominates the total market and high-end price bands, the low end is the most competitive price band, and IDC expects newcomers, such as server, security software, and network equipment vendors, to change the dynamics of the market," says Chris Christiansen, director of IDC's Internet Security research.

"While IDC does not expect challenges to Cisco's position in the near future, by 2001, low-price band revenues for firewall appliances will equal high-price band sales for the first time, and by 2003, the low-price band will gain the greatest share of the market. Vendors who compete in this segment will be better positioned to give Cisco a run for its money," Christiansen said.

People are finding that firewall appliances provide a convenience and ease of installation that software-based firewalls have not addressed. Therefore, the firewall appliance market is emerging as both a potent partner and competitor to the software firewall market.