In Q1 2014, the South African security appliances market declined 17.1% in value year on year to $10.54 million, according to the EMEA Quarterly Security Appliance Tracker published by international market intelligence and research agency IDC. In terms of market volume, 2,416 units of security appliances were shipped to South Africa in Q1 2014, representing a year-on-year decline of 11%. Total shipments are expected to increase from 10,845 units in 2013 to 16,431 units in 2018, representing a five-year CAGR of 8.7%.
Organization's budget constraints and the South African Rand depreciating against the U.S. dollar (21.4% year on year in Q1 2014) have continued to be the primary macroeconomic factors for the market value decline. The key industry-specific factor causing the security appliances market decline is the trend of infrastructure consolidation, whereby end users are moving towards next-generation firewalls and unified threat management (UTM) appliances. Standalone appliances such as virtual private network (VPN), intrusion detection and prevention (IDP), and content management features are the most commonly unified onto a single appliance and software platform. In line with this trend, virtualization technology has also driven the uptake of software-based security features for saving infrastructure CAPEX and space.
"Vendors face the challenge of maintaining their market shares in a shakeout stage of the security appliances market," says Jiaqi Sun, a research analyst at IDC South Africa. Through a combination of acquisitive and organic growth models, used-to-be niche vendors such as HP, Tipping Point, and McAfee have moved into the UTM and next generation firewall space, while vendors such as Trustwave and Blue Coat have expanded their product portfolio to include niche offerings such as mobile network access control, security information and event management, and network content analyses appliances." These value-added offerings aim to enhance customers' existing security management processes consisting of threat detection, measurement, mitigation, and monitoring and reporting functions for protection against advanced persistent threats.
In spite of Q1 results, there is good news for vendors: The tracker also predicts that market value will increase at a five-year compound annual growth rate (CAGR) of 5.7%, from $49.40 million in 2013 to $65.06 million in 2018.
"The security appliances market is expected to see increasing uptake of unified solutions such as UTM and next-generation firewalls in the SME space and among green field projects. In contrast, usage of appliances with value-added threat management features for monitoring and reporting the behavior of network, applications, devices, and data is expected to increase among large enterprises," adds Sun.
IDC's EMEA Quarterly Security Appliance Tracker provides total market size and vendor shares for security appliance technologies in an easy-to-use pivot table format. The tracker covers 42 countries across Western Europe, Central and Eastern Europe, and the Middle East and Africa. The security appliance market is further segmented by product category, product, price band, product brand, model name, server class, and operating system.