APAC network security market registers a decline in revenues

SINGAPORE: The Asia Pacific network security market registered a decline in revenues of 6.8 percent in the first quarter (Q1) of 2006 compared to the final quarter (Q4) of 2005. Spending decreased across all security technologies, except for SSL VPN (secure sockets layer virtual private network).

New analysis from global growth consulting company Frost & Sullivan Asia Pacific Network Security Market, Q1 2006, reveals that the market - covering 14 major Asia-Pac economies - earned revenues of US$290。8 million in Q1 2006.

"Despite the lacklustre performance, the market expanded by 13.7 percent compared to the same quarter last year," says Frost & Sullivan industry analyst Jay Tan.

Most enterprises and governments were involved with budget evaluation and planning at the beginning of the fiscal year. Therefore, spending on network security is typically slower than other quarters. "The festivities and Chinese New Year holiday season also delayed business activities, not only in China but also in other Asia-Pac countries including Singapore, Malaysia and Vietnam," observes senior research analyst Arun Chandrasekaran.

Early adopters of ICT (information and communications technology) such as Singapore, Hong Kong, Australia, South Korea and Japan spent less on major networking infrastructure projects. The bulk of investments were mainly in product replacements and upgrades, as well as increased adoption of more advanced technologies such as SSL VPN.

"Enterprises in mature markets such as South Korea and Taiwan are also slowing down spending on intrusion detection or prevention solutions," says Tan. This can be attributed to the perceived low returns on heavy investments in intrusion detection and prevention (IDP) solutions in the last two years.

"Nevertheless, healthy growth in expenditure can be expected in the subsequent quarters," forecasts Tan. "Deployments of integrated security appliances are already giving impetus to the network security market."

Growth of this market also depends on the advancements in developing and mature markets. "Infrastructure projects in developing markets, and replacements and upgrades in more mature markets are likely to boost spending in network security solutions," adds Tan.

Competition is further intensifying in the Asia Pacific region. Major vendors are placing increasing emphasis on marketing and lead generation. "Global and local vendors are aggressively focusing on the SMB (small and medium business) sector for their integrated solutions," reveals Tan.

The market is expected to sustain growth, considering the rising need for better security, increasing end-user awareness, expanding network infrastructure, and greater availability of comprehensive solutions from vendors.

© CIOL Bureau