Network security market showing highest growth since 2012

on Apr2
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Mark McLaughlin, Palo Alto Networks

David Paul Morris | Bloomberg | Getty Images

Mark McLaughlin, Palo Alto Networks

The cybersecurity market further accelerated in the fourth quarter, according to an analyst note Tuesday from Bank of America Merrill Lynch, driven by higher demand for network security products like firewalls and protective tools meant to stop newer types of malware.

The total market for network security products in 2018 grew 12.6 percent compared to 2017, according to analysts Scott Casher, Daniel Bartus and Tal Liani. It was “the fourth consecutive quarter of double-digit growth,” and “the strongest year since we began tracking the market in 2012,” the analysts wrote.

“We expect market strength continue in 2019,” they said. Total spending on all cybersecurity products is expected to exceed $124 billion worldwide, according to Gartner.

The results are driven by a strong market for firewall products, a traditional cybersecurity measure meant to block access to portions of a corporate network from the outside internet. Firewall products showed 16.3 percent growth to $2.4 billion for the fourth quarter of 2018. Advanced threat protection products, which are used to find newer and more sophisticated strains of malicious software, grew to $416 million in the fourth quarter, up 19.1 percent from the year before.

The note indicates stronger growth in the marketplace for products dominated by companies including FireEye, Palo Alto Networks, Cisco, McAfee, Fortinet, Check Point and Huawei than even past bullish analysts had predicted. It also indicates companies are continuing to ramp up their spending on more traditional “perimeter security” products even as they move more corporate data and infrastructure onto cloud services providers.

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