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VPN And Firewall Market Poised For Fast Growth

After a 2% revenue growth in the third quarter of 2004, the worldwide virtual private network and firewall hardware and software market is poised to experience substantial growth over the next year, according to a new report by Infonetics Research.

According to the report, VPN and firewall revenues will grow 16%, reaching $843 million by the third quarter of 2005. By 2007, Infonetics predicts annual revenues to reach $3.7 billion. Despite unexceptional sales of VPN and firewall appliances in the third quarter of this year, Cisco remains the overall market leader, with CheckPoint in second and Juniper in third place. Infonetics notes that Cisco's third quarter performance was aided by strong growth in hardware secure router sales and growth in secure sockets layer VPNs.

"SSL VPNs are starting to come in to their own now, and make a real impact on the market," Infonetics principal analyst Jeff Wilson said in a statement. "At first it was thought that their usability was more limited because they were a remote-access only solution, but now many vendors are positioning them for internal security and company-wide secure application access, which broadens the target market significantly."

Some 82% of all VPN and firewall hardware revenue comes from sales of appliances, while software makes up 13%, and SSL VPNs account for 5%. However, Infonetics expects that to change by 2007, with SSL VPNs to accounting for 14% of the total market and software dropping to 8% and appliances to 78%. The North America market accounts for 44% of all revenues, with Europe, the Middle East and Africa in second place at 31%. The Asia Pacific market represents 20% of VPN and firewall revenues.