Report: VPN, firewall sales booming

Available, low-cost Internet bandwidth is the key market driver for intrusion detection system (IDS) sales, according to a recent report.

San Jose, Calif.-based research firm Infonetics Research Inc. reported Wednesday that international IDS revenue hit US$94 million in the second quarter of this year. Infonetics predicts IDS sales to climb 42 per cent to US$135 million by the same time next year. Worldwide annual revenue is expected to top US$4.9 billion by 2005, Infonetics said.

North America leads the way, accounting for 47 per cent of VPN and firewall hardware and software revenue in the third quarter of 2002, followed by Europe, the Middle East and Africa with 31 per cent and Asia-Pacific at 17 per cent. North America will retain that dominant position through 2003, Infonetics said.

Low-cost bandwidth allows users to migrate from a centralized connectivity model to a distributed Internet model – this pushes VPN and firewall sales, according to Infonetics.

As IDS product performance increases and in-line products ship and find acceptance, there will be a “serious blurring” of the distinction between IDS and firewall, Infonetics said, adding that standalone IDS systems will have a place for a long time because many large organizations keep the management of firewalls and IDS separate, and are hesitant to put IDS in line.

“The IDS market is experiencing some disruptive technology shifts right now, but is poised for dramatic growth over the next couple of years…as more hardware enters the market, IDS technology gets integrated into network and security products, and the endpoint security market continues to grow,” said Infonetics analyst Jeff Wilson in a statement.

VPN and firewall appliance hardware and software products account for 60 per cent of the market, Infonetics said, adding that sales of routers with integrated security features are increasingly popular and account for 24 per cent.

For more details about the firm’s findings, visit