Security spending hike good for Cisco

Data center, cloud builds boosting market to near $3B

A new round of spending is lifting the data center security market, according to Infonetics Research. Service providers and enterprises are rebuilding data centers to equip them for cloud duty, and in doing so they are implementing new network architectures and increased use of virtualization.

Concurrently, they need new security infrastructures to accommodate the build outs.

As a result, Infonetics expects the data center security appliance market to grow to $2.7 billion in 2016 from $2.032 billion in 2011, representing a compounded annual growth rate of just under 6%. Leaders in the market include Cisco, Juniper, McAfee, Fortinet and Check Point.

Revenue in the virtual security appliance segment is up 34% from the second quarter of last year, and Infonetics forecasts annual revenue to grow at a compounded annual rate of 21% through 2016. Driving this growth are cloud buildouts, server virtualization, and the presumption that security is a hindrance to cloud adoption.

Virtual appliance vendors include established security players, virtualization platform companies, and specialists, according to Infonetics.

Investment form UBS also notes an uptick in IT spend on security, based on briefings from Check Point, Fortinet and Imperva at its annual Tech Conference in New York. UBS believes the trend to be positive as well for Cisco and Juniper but adds that these companies must continue to innovate to stem share losses vs. pure play competitors.

In Cisco's just completed first quarter of fiscal 2013, security grew 6%. CEO John Chambers said trends like cloud and BYOD play to Cisco's strength in security, and that development of a "security architecture" will help drive the company's business.

More from Cisco Subnet:

Cisco acquires virtual network controller maker vCider

Major enhancements coming for Cisco Catalyst 6500

Cisco takes next steps to blend wired, wireless networks

HP takes aim at Cisco, Juniper with full SDN portfolio splash

Cisco releases major update to its security management product

Juniper shaking up data center portfolio?

Cisco rival quietly downsizing too

Cisco CEO's almost excellent adventure

Cisco CEO Chambers hints at retirement

Six Free Cisco Labs

15 More Useful Cisco Sites

Follow all Cisco Subnet bloggers on Twitter.Jim Duffy on Twitter


Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.
Must read: 10 new UI features coming to Windows 10