3/20/2005 -- If the networking market as a whole is a-booming, then the market for network security software and appliances is a-soaring—into the stratosphere, apparently.

According to market research specialist Infonetics, worldwide network security software and appliance revenues exceeded $3.7 billion in 2004, an increase of 30 percent from 2003. Now, 30 percent year-over-year growth is encouraging just by itself, but if Infonetics is right, the network security software and appliance market is just getting started: By 2008, it will have increased to $5.5 billion—an increase of almost one-third over last year’s total.

Overall, worldwide network security revenue grew by 5 percent between the third and fourth quarters of 2004. With the exception of the VPN/firewall software market, all categories posted growth, Infonetics said. By the fourth quarter of this year, the researcher anticipates that worldwide network security revenue will have grown to $1.2 billion, an increase of 25 percent.

What’s driving this growth? The usual suspects, says Jeff Wilson, a principal analyst with Infonetics—namely, viruses, malware and increasingly sophisticated targeted attacks.

“VPN and firewall appliances are the backbone of network security, and will continue to function as such for a long time,” Wilson said in a statement. “New technologies will appear, and often start life as standalone products, but eventually their key features will be absorbed into the multi-function VPN/firewall appliances. IPS and gateway anti-virus technology are good examples of this.”

Lest you be tempted to dismiss Infonetics’ projections as the folderol of just another know-nothing market researcher, Wilson notes that Infonetics Research’s 2003 revenue forecasts for the 2004 VPN and firewall product market, along with the VPN and firewall appliance (and the IDS/IPS) markets were all within 1 or 2 percent of actual revenue.

For the year, Infonetics found that Cisco continued to dominate, leading the market with over 30 percent of the total network security software and appliances revenue, for both Q4 of 2004, as well as for the year. Cisco has maintained this dominance since 2002. Elsewhere, Check Point and Juniper Networks were second and third, respectively, followed by Enterasys, ISS, McAfee, Nokia, Nortel, SonicWALL and Symantec.

Drilling down into the network security software and appliance market, Infonetics says that VPN and firewall software and appliances account for more than three-quarters (78 percent) of revenue, with IDS/IPS second at 15 percent, and gateway antivirus rounding out the top three at 7 percent. -Stephen Swoyer