Cisco Systems (CSCO)

[chmcnfunds]

Cisco still largest security hardware firm; Fortinet, Palo Alto gain share • 7:13 PM

Compared with servers and storage systems, demand for security hardware remains quite healthy. IDC estimates security appliance sales rose 6.5% Y/Y in Q3 to $2.2B, even as units only rose 0.3% (indicates higher ASPs). Sales had risen 6.1% in Q2 in spite of a 1.5% shipment drop.

IDC thinks Cisco (CSCO), which just acquired leading intrusion prevention system (IPS) vendor SourceFire, had a 15.9% industry share, down fractionally Y/Y. #2 Check Point (CHKP) is given a 12.4% share (-30 bps), and #3 Fortinet (FTNT) a 6.4% share (+50 bps).

#4 Juniper (JNPR), whose security unit has been a weak spot and is now under new management, saw its share fall 170 bps to 6.2%. Meanwhile, fast-growing next-gen firewall vendor Palo Alto Networks (PANW) saw its share rise 140 bps to 5.3%.

In spite of healthy industry growth, the firewall market (21% of industry revenue), which Cisco, Juniper, and Check Point are well-exposed to, saw a 15% Y/Y sales drop. On the other hand, the unified threat management (UTM) market, which Fortinet is a leader in, grew 29%, and the IPS market grew 8%.

From SA
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CSCO