Worldwide VPN and firewall hardware and software revenue increased by a modest two per cent between the second and third quarters of this year, but is projected to grow 16 per cent to $843m by the third quarter of 2005.

According to Infonetics Research's quarterly worldwide market share and forecast service, annual sales in the sector are expected to grow to $3.6bn in 2007.

Both Cisco and Juniper suffered a soft quarter for appliances, but the report noted that Cisco compensated with strong growth in hardware secure router sales and growth in SSL VPNs.

"SSL VPNs are starting to come in to their own now, and make a real impact on the market," said Jeff Wilson, principal analyst at Infonetics Research.

"At first it was thought that their usability was more limited because they were a remote access only solution, but many vendors are now positioning them for internal security and company-wide secure application access, which broadens the target market significantly."

The study found that Cisco remains the overall VPN and firewall appliance and software revenue leader, a position it has maintained since the first quarter. Check Point came in second with Juniper in third for revenue.

According to the report, VPN and firewall appliances make up 82 per cent of all VPN and firewall hardware revenue. Software accounts for 13 per cent, and SSL VPNs five per cent.

By 2007 SSL VPNs will jump to 14 per cent of the total market, while software will drop to eight per cent. Appliances will fall to 78 per cent, Infonetics predicted.

North America accounts for 44 per cent of all VPN and firewall hardware and software revenue, while EMEA is next at 31 per cent, then Asia Pacific at 20 per cent.

Source: VNUNET News

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