Information Security Equipment (Global Market)

2023

Global Security Modules Market Size Reaches $1.33 Billion

In 2023, the global hardware security module (HSM) market reached $1.33 billion. In the future, this segment is expected to grow steadily due to the ongoing digital transformation and the need to increase the level of security of IT systems. This is stated in a study by Fortune Business Insights, the results of which were published on October 14, 2024.

HSM is a specialized computing device that is designed to perform high-security cryptoperations. Such modules provide protection for transactions, identities, applications, etc. One of the factors driving the demand for HSM solutions, analysts call the increasing number of leaks of personal and confidential information. As organizations continue to adapt to the changing digital landscape, HSM's role in data protection and financial transactions is increasing. In addition, the need for more effective security measures is increasing amid the rapid introduction of artificial intelligence.

From a geographical point of view, North America became the leader in HSM costs in 2023, showing a result of $0.49 billion. At the same time, Europe demonstrates the highest growth rates, where an active fight against cyber threats is being waged. Significant industry development is also observed in the Asia-Pacific region. Key players in the global market include Entrust, Thales, Utimaco, IBM, Infineon Technologies, Securosys, Futurex, Swift, Yubico and Fortanix.

At the end of 2024, revenue in the HSM segment is estimated at $1.47 billion. Fortune Business Insights analysts believe that in the future, the CAGR (CAGR in compound percentage) will be 12.4%. As a result, by 2032, costs globally will reach $3.74 billion.^[1]

Growth in sales of cybersecurity equipment by 5.2% to $17.6 billion

In 2023, the volume of the global equipment market for cyber security reached $17.6 billion. This is approximately 5.2%, or $868 million, more compared to 2022. Such data are reflected in a report IDC published on March 7, 2024.

The information security device segment remains a key focus for investment in the relevant area as additional subscription services continue to emerge to protect IT infrastructures. During 2023, new products with increased performance, artificial intelligence and improved energy efficiency debuted. This allows companies to optimize their costs, "says Carlo Davila, IDC research manager.

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IDC

In the fourth quarter of 2023, the global market for cybersecurity equipment showed an increase of 0.8% on an annualized basis - up to $4.96 billion. From a regional point of view in the American market, revenue growth compared to 2022 was 5.1%. In the Asia-Pacific region, on the contrary, a decline of 4% was recorded. In Central and Eastern Europe, sales climbed 15.1% year-on-year, while Western Europe posted a 4.6% gain. The Middle East and Africa saw a 17.7% contraction. In Canada, there was an increase of 10.4%, in Latin America - by 7.6%.

According to the results of the last quarter of 2023, the largest player in the global cybersecurity equipment market is Palo Alto Networks with a share of 18.2%. Fortinet is in second place with 17.7%, and Cisco closes the top three with 10.9%. This is followed by Check Point and Huawei with 7% and 3.5%, respectively. Thus, the five leading companies together occupy more than half of the industry. The total share of all other suppliers is estimated at 42.8%.^[2]

2016

9% Growth with UTM Solutions - IDC Data

On March 9, 2017, the analytical company International Data Corporation (IDC) released brief results of a study of the global market for information security equipment (IS). Sales of these solutions rose by 9% largely due to Unified Threat Management (UTM).

In 2016, the total revenue of manufacturers from the sale of hardware used for cyber defense amounted to $11.5 billion against $10.6 billion a year earlier. Device shipments rose 17% and slightly exceeded 2.7 million units.

The largest manufacturers of information security equipment, data from IDC for 2015 and 2016.

The study notes that the rise is stimulated by the UTM solutions segment, the volume of which has tripled over the past five years and reached a record $5.6 billion (corresponds to about half of the information security equipment market) in 2016. Compared to 2015, this indicator is 16.7% higher, these growth rates were the largest among all sectors of the market under consideration.

Sales of firewalls and content management solutions in 2016 rose by 10.4% and 0.8%, respectively. In the segment of intrusion detection and prevention systems, there was a 4.6% decline.

The strongest growth in information security equipment sales (by 18.7%) in 2016 was recorded in the Asia-Pacific region. In the United States and EMEA countries (Europe, the Middle East, Africa), which account for about 65% of the global implementation of hardware systems for information security, there was a rise of 6.8% and 5.1%, respectively, compared to 2015.

As for the largest manufacturers of information security equipment, the balance of power remained unchanged. The leadership group is as follows:

• Cisco;
• Check Point;
• Palo Alto Networks;
• Fortinet;
• Huawei.

It is worth noting that in 2016 Palo Alto Networks increased sales of information security equipment by 35%, which allowed the company to approach Check Point.^[3]

2014

Dell'Oro Group Data

On August 26, 2015, the research company Dell'Oro Group announced the results of the global market for information security equipment (information security). There have been some permutations among the manufacturers of these solutions.

According to analysts for 2014, Cisco's share of the global security hardware market was 24.9%, an increase of 1.4 percentage points compared to 2012. Juniper Networks, then in second place, slipped to fifth place, reducing its presence from 8.7% to 4.8%.

Juniper slides from second to fifth in the list of largest manufacturers of security hardware

Juniper lost to Check Point (market share in 2014 - 9.3%), Fortinet (8%), Palo Alto Networks (5.2%). In 2012, these companies had 6.5%, 2.9% and 2.6%, respectively.

The largest manufacturers of security hardware, data from Dell'Oro Group. Source: TAdviser

Dell'Oro Group analyst Casey Quillin says the changes in the group of leading vendors reflect structural changes in the market: customers who choose information security solutions to protect their systems have become less focused on port security and network perimeter, focusing on protecting the devices used, locations and applications.

According to the expert, Cisco managed to maintain its leadership thanks to the purchase of intrusion protection and firewall developer Sourcefire in 2013. Juniper has also tried to expand the functionality of its products to match Cisco, however, the company's performance has not paid off, Quillin said.

Dell'Oro Group did not specify the size of the global market for information security equipment, but noted that sales of these solutions are growing. Against the background of the rise in the market, there may be a situation in which a number of companies will earn more competitors and take away customers from Juniper and other manufacturers, Casey Quillin predicts.

The specialist, Check Point, Palo Alto and Fortinet, in particular, connects the progress with the release of a new generation of products.^[4]

Growth by 8.4% to $9.4 billion. Cisco gives up positions

On March 16, 2015, analysts at International Data Corporation (IDC) published a research report characterizing the state of the global information security (IS) hardware market. Its volume continues to grow, and Cisco retains the leadership in sales of this equipment, although the American company is not doing the best.^[5]

According to experts, in 2014, sales of network protection devices on a global scale amounted to $9.4 billion, which is 8.4% more than a year earlier. Delivery of solutions during this period increased by 8.3% to 2.1 million units.

In October-December 2014, the volume of the market under consideration grew by 8.6% in money (up to $2.6 billion) and by 16.7% in physical terms (up to 635,933 units). As of the end of 2014, the total revenue of vendors from sales of information security equipment grew for 21 consecutive quarters, and shipments of these products increased by four calendar quarters in a row.

Cisco is losing ground in the market for hardware information security solutions

The level of competition in the global information security hardware market deserves special attention. At the end of 2014, Cisco retained its leadership, gaining a 17.8 percent market share, which turned out to be 1 percentage point more than a year earlier. However, this figure in the fourth quarter of 2014 decreased to 16.6% from 18% in October-December 2013.

The quarterly demand for Cisco hardware information security solutions has remained almost unchanged, while the closest pursuers are increasing sales of these devices. Thus, Check Point, which is behind Cisco, recorded a 14.4 percent increase in sales to $347 million, which allowed the vendor to record 13.2% of the global sale of network protection equipment in the final three months of 2014. A year earlier, this figure was 12.5%.

The top three most profitable producers include Fortinet, whose market share in October-December 2014 reached 7.7% against 6.5% in the same period of the previous year. The company's revenue climbed 27.4%. At the same time, Fortinet remains the largest supplier of hardware information security solutions in terms of shipment volume. Thanks to UTM products, the company controls 18.8% of the market, according to IDC data.

The fastest growing vendor is Palo Alto Networks. For this company, sales of information security devices jumped 53.3% in the fourth quarter of 2014 on an annualized basis, amounting to $199 million, which corresponds to 7.6% of global importance. Taking into account the current growth rate, Palo Alto Networks may enter the top three vendors in 2015.

Second quarter: The market for information security equipment in Europe has grown, while in Russia it has fallen

According to IDC, in Q2 2014, EMEA data protection vendor revenue reached $654.8 million, up 6.2% yoy. In unit terms, deliveries increased by 0.8% and reached 174.771 units.

As before, Cisco became the leading supplier in the market, whose share in the quarter increased by 1% to 20.2%. The fastest growing segment in Q2 was the Unified Threat Management (UTM) solution, which grew 14.9% yoy. In total, UTM solutions in EMEA accounted for 48.4% of the market.

Top 5 Information Security Vendors in EMEA (Volume), Q2 2014

Source: IDC, 2014

The Western European market grew by 6.7% compared to the same quarter of 2013, to $628.54 million. As in previous quarters, the main driver of market growth here was UTM solutions, which accounted for almost half of the revenue of vendors, and growth in this segment amounted to 13.3%.

The market of Central and Eastern Europe, the Middle East and Africa in the 2nd quarter increased to $149.1 million, by 4.2% year-on-year, contrary to the forecasts of analysts who expected a moderate decline in it. At the same time, the Russian market for technical means of information protection has shown a reduction, expressed in double digits, according to IDC. Analysts attribute the decline in supplies to Russia to market uncertainty caused by the situation around Ukraine and the slowdown in the growth of the Russian economy, raising fears of recession.

Central European market is expected to become one of the fastest growing in the EMEA region, the demand for hardware solutions for information protection will keep pace with the growth of the economy. At the same time, the deteriorating political situation and increased business risks in Russia and Ukraine will have a long-playing negative effect on the countries of the Eurasian Economic Community, the IDC notes. "This can put additional pressure on foreign vendors and reduce future deliveries in the medium term."

The Russian representative office of CheckPoint told TAdviser that for their company the second quarter of 2014 in the local market was in absolute numbers expected to be lower than the same period last year. This is due, first of all, to the fact that in the second quarter of last year there was a large "one-time" infrastructure project associated with the "Big Construction," in which CheckPoint participated, it determined the change in seasonality and the distribution of business by quarters.

"It is possible that other manufacturers had the same picture. If we compare the indicators of real business, then the dynamics are more than positive, according to the results of the first two quarters we showed an increase of 14% compared to last year, according to the results of three quarters, according to expectations, we will reach an increase of 25% compared to last year and, according to our forecasts, we will end the year with just such an indicator in the region in absolute. Yes, the numbers of Ukrainian business, for obvious reasons, are much lower than last year's indicators (Ukraine is part of the CIS cluster and our area of ​ ​ responsibility), but this is overlapped by double-digit growth rates in Russia, "said Vasily Diaghilev, head of Check Point in Russia and the CIS.

He added that undoubtedly tensions on both the political and economic front are taking a toll on some projects, with many switching to economy mode and trying to optimize budgets. In this situation, according to Diaghilev, Check Point was in a rather advantageous position, since it is an Israeli company and its products do not fall under any restrictive sanctions, unlike some products from American and European vendors.

EMEA Information Security Equipment Market, 2Q2013-2Q2014 Product Categories, Vendor Revenue.

2012

Third quarter: Eastern Europe actively buys information security equipment

According to IDC^[6], in the third quarter of 2012 compared to a year earlier, both manufacturers' revenue and equipment supply increased in the information security equipment (IS) market. Thus, revenues of information security systems vendors increased by 5.7% in annual comparison to almost $2 billion, and deliveries increased by 1% to 499 thousand units. In the second quarter of 2012, for comparison, the revenue of vendors increased by 6.6%, and deliveries by 5.8% compared to the second quarter of 2011.

The maximum increase was recorded by IDC in the Asia-Pacific market (with the exception of Japan) - 13.3%. In Western Europe, the revenue growth of vendors remained very moderate - by 0.5% in annual terms. In Japan, supplies increased as much as possible in unit terms - by 8.3%, in second place in the region of Central and Eastern Europe, the Middle East and Africa, where this figure reached 7.9%. In the United States, revenue growth was recorded by 4.6%, while deliveries fell by 1.2% compared to the third quarter of 2011.

Top 5 vendors of information security equipment by revenue of $ million

Source: IDC, January 2013

In general, in the global market, the total share of the five largest vendors in the third quarter of 2012 amounted to 48.5%. The first place was occupied by Cisco with 16.2% of the share in the total revenue of manufacturers, the second place was taken by Check Point - 12.8%, then Juniper (7.9%), Fortinet (5.9%), McAfee (5.7%).

Q2

According to IDC^[7] according to ^[7], vendor revenue in this market increased by 6.3% in annual terms to $2 billion, and deliveries increased by 6.5% to 496.7 thousand units of equipment. In the first quarter of 2012, the growth indicators for these two parameters were 9.7% and 12.9%, respectively.

Geographically, Latin America grew at the fastest pace of safety equipment deliveries, with an annual gain of 18.6% in the second quarter. In Central and Eastern Europe, meanwhile, 18.5%. Only in the Asia-Pacific region (excluding Japan) and Canada, revenue growth nevertheless turned out to be double-digit. In the United States, the revenue of vendors grew by 8%, and the supply of devices - by 4.8%.

Top 5 vendors in the global security equipment market, Q2 2012, revenue of $ million

The combined share of the five largest vendors in the security equipment market in the second quarter of 2012 amounted to 49.4% of the market. In the top five, companies such as Cisco, Check Point, Juniper, Fortinet, McAfee.

Q1

According to IDC^[8], both manufacturers' profits and device shipments increased in the global security equipment market in the first quarter of 2012, the positive dynamics in this market has been celebrated for the eighth consecutive quarter. In particular, the profit of world producers increased by 9.7% in annual terms to $1.9 billion, and deliveries in unit terms increased by 12.9% to 511.2 thousand units.

Interestingly, all regions of the world with the exception of the Asia-Pacific region (except Japan) showed a double-digit increase in the supply of safety equipment. The maximum increase in supplies in the first quarter of 2012 was noted in Central and Eastern Europe - 39.3% in annual terms. The maximum increase in manufacturers' income was recorded in the US market - 16.2%.

The combined share of the 5 largest vendors in the global security equipment market grew to 50.7% in the first quarter of 2012. Cisco remained the market leader with a share of 18.4% of global manufacturers' revenue, Check Point was in second place (12.7%), and annual growth was 25.9%. Among the top five, only Juniper's share decreased - by 0.7% for the year. Closed the top five McAfee and Fortinet.

Top 5 vendors in terms of revenue in the global security equipment market in the first quarter of 2012, $ million

IDC, June 2012

As for functional markets, the firewalls/VPN segment showed the maximum growth for the year - by 23.3% to 28.3% of the global security equipment market. The UTM (Unified Threat Management) segment amounted to 28.5%, its growth for the year is 12.2%. The content management segment accounted for 17.7%.

See also

Information Security (Global Market)
Information Security Software (Global Market)

Notes