The firewall software market has not been immune to the economic and political influences that have dragged down markets worldwide. The market for firewalls experienced a dip after September 11, but International Data Corp. predicts a resurgence that will begin in 2004 and should continue through 2005.
The Framingham, Mass.-based research firm predicts that software licensing and maintenance revenue will reach $943 million this year, up 5.7% over last year.
IDC says this upsurge can be traced to improving conditions in the market, an increase in bundling firewall and VPN software in appliances, government regulations mandating certain security configurations, and a climb in the use of firewalls to secure the application layer, Web services and wireless networks.
IDC adds that the firewall market should continue to sprout, growing to become a $1 billion business in 2004 and hitting close to $1.1 billion in '05.
Check Point Software Technologies Ltd., meanwhile, remains the far-and-away firewall and VPN market-share leader with 48%. The company's acquisition this week of Zone Labs Inc. pushes it over the 50% barrier and gives it a sizable lead in the worldwide corporate personal firewall market (38.7% combined).
In 2002, Check Point cleared $403.5 million in enterprise firewall and VPN software revenue in 2003, and it owns 54.1% of market share. Microsoft is next with 12.5%. No other vendor reached 10% market share.
Check Point is also the corporate personal firewall leader, with $23.5 million in revenue and 26.9% of market share. Internet Security Systems (ISS) is next with 16.3% of market share, followed by Zone Labs' 10.8% market share.
The Check Point-Zone Labs combination is expected to boost the corporate personal firewall market, which IDC predicts would drop annually to 22.7% by 2005. Enterprise firewall and VPN software, meanwhile, is expected to grow at an annual rate of at least 2.7% until 2005.
IDC said load balancing and high availability will continue to be incorporated into firewalls. Enterprises will also be using firewalls to protect applications more and more. Firewalls will adapt to wireless demand and will secure the wired gateways hosting wireless access points.
IDC also predicts an emerging opportunity for firewalls with Web services and storage networks.
"Firewalls will become the key application where centralized security policy will be enforced. They will have increased responsibility to host and interact with other security solutions targeted directly at gateway protection," the report concludes. "The firewall market is becoming increasingly fragmented as it matures, and products are designed to meet specific needs, such as dedicated e-mail server firewalls or other specific application-protection mechanisms. These specialized firewalls will sit behind a gateway firewall."
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