The South African security appliances market declined 10.3% in value year on year during Q4 2013 to total $12.25 million, according to market intelligence firm International Data Corporation (IDC).
A security appliance is defined as any form of server appliance that is designed to protect computer networks from unwanted traffic.
The IDC predicts that the market’s value will increase at a five-year compound annual growth rate (CAGR) of 6.5% to total $66.85 million in 2018, up from $48.75 million in 2013.
The decline in the market’s value was primarily caused by consumer budget constraints and the South African rand depreciating more than 18% against the U.S. dollar in 2013.
Despite this, Fortinet, Juniper, Cisco, and CheckPoint all maintained their leading market positions, collectively representing about 61% of the market’s value share in Q4 2013.
Together, firewalls and unified threat management (UTM) appliances increased their contribution to the security appliances market in Q4 2013, generating 15.0% and 59.6%, respectively, of the total market value.
The corresponding value contributions of content management and intrusion detection and prevention (IDP) appliances amounted to 11.5% and 6.2%, respectively. Given the current cost-reduction and unification trends, demand for content management and IDP integrated into UTM and next-generation firewall appliances is set to increase.
Meanwhile, market demand for standalone versions of VPN, IDP, and content management appliances is expected to concentrate on the medium to high-end range.
In Q4 2013, 2,934 units of security appliances were shipped to South Africa. Total annual shipments are expected to increase from 10,847 units in 2013 to 16,667 units in 2018, representing a five-year CAGR of 9.0%.
“The trend toward market consolidation continues, with UTM vendor Sophos acquiring close competitor Cyberoam in February 2014,” said Jiaqi Sun, a research analyst at IDC South Africa. “This acquisition will further strengthen Sophos’s capability to offer a comprehensive range of security solutions and expand its customer base in emerging markets, including South Africa.”
“Cost-effective UTM appliances will continue to gain traction in the largely untapped small and medium-sized business segment, where most customers still rely on traditional firewalls embedded in their network routers,” Sun said.