VPN/firewall appliance sales rise but software sales in downward spiral

It’s time once again for a peek at one of those market reports on VPN sales and this one shows that sales of these products will continue to grow well.

However the popularity of VPNs is being challenged because spending in general is down and because new technologies have popped up to offer more choices, making VPNs a less clear choice, according to the report “VPN and Firewall Appliances and Software” by Infonetics Research.

The report points to Juniper’s acquisition of NetScreen as a highlight of the last quarter, which “will make for a very exciting battle between Cisco and Juniper in the years to come,” says Jeff Wilson, principal analyst for Infonetics, and author of the report.

The advent of Secure Sockets Layer remote access is also fanning sales of this type of equipment, he says. Worldwide this accounted for only $22 million in sales last quarter, but the study projects this to grow.

Overall, worldwide VPN and firewall appliance sales were $1.9 billion in 2003, which is 16% higher than in 2002. The market will grow at more than 16% this year, the study projects.

While appliances are on the rise, sales of software that customers install on their own servers dropped 6% last year, the study says, which is part of a trend that will continue as customers turn more and more to hardware platforms.

Measured by revenue, Cisco was the No.1 vendor followed by Check Point and NetScreen (Juniper). The report lists Nokia, Nortel, SonicWall, Symantec and WatchGuard as second-tier vendors.