From: Anthony Arrott (IMT-US)
Sent: Thursday, March 18, 2010 2:58:53 PM
To: Michael Sweeny (MKT-US); Newsbank
Subject: RE: NEWSBANK: Cisco battered by large fall in security market
Auto forwarded by a Rule
So is this the takeaway: Stick with Trend Micro as a strategic partner for security and forget about security acquisitions?
Sent: Wednesday, March 17, 2010 4:07 PM
Subject: NEWSBANK: Cisco battered by large fall in security market
Cisco battered by large fall in security market
Rivals scoop up customers in Q4
By John E. Dunn | Techworld
Published: 10:27 GMT, 17 March 10
‘Nobody fires you if you buy Cisco' it was once said but it seems somebody should tell the corporate security sector which deserted the giant in droves in late 2009, new figures show.
According to market analyst Canalys, in the fourth quarter of last year Cisco's share of the market for a wide basket of security products, including hardware, software and services, dropped a staggering 22 percent year-on-year.
Woundingly, Cisco was the only major vendor to show falls of any kind, indeed every other leading company in the sector showed healthy gains in a market that grew 3.6 percent. MCafee was up 28.7 percent, Symantec 19.3 percent, Check Point 14.3, and Cisco's upstart rival Juniper Networks saw 32.2 percent.
Other strong gainers included ambitious security appliance specialist, Fortinet, and Japanese vendor Trend Micro.
"It [Cisco] is still the dominant vendor in the appliance market, with a market share of 27.7 percent. But its competitors, such as Juniper, are catching up." said Canalys analyst, Alex Smith.
The security market is currently buoyed by the arrival of Windows 7, and growing interest in cloud computing, virtualisation and services, the analysis suggests.
The report is circumspect about what is ailing the networking giant, but speculatively there are three likely candidates, primarily that it is too expensive compared to its rivals that often price against what it charges. It is also possible that Cisco is lagging in key areas of security innovation - its traditional strength has always been integrating disparate bits of technology rather than forging new ideas - or perhaps the company sometimes has a problem communicating its value.
A timely example of the latter was its hyped launch of a new high-end CRS-3 router a week ago. Despite its impressive stats, describing it as the router that would ‘forever change the face of the Internet' invited ridicule. At other times, the company churns out press releases to journalists and analysts that are legendary for their impenetrable and unfashionable fascination with buzz-terms and business jargon.
Cisco's results for Q3 of 2009 were better than Q4, but came after a difficult first two quarters, which makes the year a tough one overall. The company has something to prove in 2010, with the Q1 performance under special scrutiny
Worldwide security market storms ahead in Q4 2009
- Security in Q4 2009 grows 10.1% sequentially
Palo Alto, Singapore and Reading ( ) – Monday, 15 March 2010 UK
For immediate release
- The worldwide security market was worth a total of $3.6 billion in Q4 2009
- Security hardware and software grew 3.6% year-on-year in the fourth quarter
- Juniper Networks grew its share of the appliance market to 13.1%
- Client software rebounded strongly with the resurgence in PC spending
Q4 2009 research highlights
Like most industries, the security market experienced declines during much of 2009 as panicking businesses avoided or delayed IT procurement. But as macro-economic conditions began to stabilize and business confidence returned, spending also resumed. In the fourth quarter of 2009, delayed refreshment business and end-of-year budget spend contributed to security’s strong sequential growth of 10.1%, with the total market reaching $3.6 billion.
Client security software grew strongest year-on-year during the quarter, by 8.6%. ‘The release of Windows 7 and the resurgence of the PC market have dramatically helped the client security market,’ said Nikki Babatola, Analyst at Canalys. ‘This improvement will likely continue throughout 2010 as businesses roll out more computer systems.’ Symantec retook the top spot in client security in the second half of 2009, with a year-on-year growth rate of 12.3% in the fourth quarter and 26.7% market share. McAfee grew 6.4% to leave it in second place. Trend Micro had strong growth of 13.9% and increased its market share to 14.3%.
Cisco retained the number one position in IT security with a market share of 17.9%. ‘It is still the dominant vendor in the appliance market, with a market share of 27.7%,’ said Canalys Analyst Alex Smith. ‘But its competitors, such as Juniper, are catching up.’ Juniper Networks, Fortinet and McAfee all gained market share in Q4 2009, with each hitting double-digit annual growth. ‘McAfee in particular has had good traction in its appliance business after having acquired Secure Computing at the end of 2008,’ added Babatola. ‘Though Check Point experienced some contraction in its appliance business during the fourth quarter, it is now seeing the majority of its security business deployed in an appliance form factor.’
The buoyant mood in the security market was also reflected by those attending the RSA security conference in
About the service
The shipment estimates and research results discussed in this release come from the Canalys Enterprise Security Analysis service. Canalys’ market data is used by vendors the world over to provide a coherent view of the enterprise infrastructure markets. Canalys offers services looking at the markets by country in EMEA, as well as providing global market overviews.
Canalys specialises in delivering high quality market data, analysis and advice to the world’s leading technology vendors. It is recognised as a key provider of continuous advisory services and confidential custom projects for marketing managers and strategists within blue-chip IT, telecoms, navigation and consumer electronics companies. It has unrivalled expertise in routes to market for all kinds of high technology products and services in the consumer, SMB and large enterprise segments, and provides worldwide market data and trends analysis.
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