Threats Buoy Security Hardware

Despite adding four vendors to the 2005 VARBusiness Annual Report Card (ARC) Security Appliances category, solution providers' assessments of the biggest players in that industry remain unchanged.

To wit, SonicWall--whose share of the Unified Threat Management (UTM) security-appliance market doubled to 23.6 percent in Q2 2005 vs. the same quarter last year, according to IDC--held onto its overall lead this year.

"Demand for appliance [manufacturers'] integrating multiple security technologies in one managed appliance is rising, and SonicWall's capabilities in that regard make it extremely easy to provide maximum protection to our clients' networks," says Tod Holsenbeck, senior network administrator at Valley Oak Systems, a developer of browser-based insurance-claims software in San Ramon, Calif.

For its part, WatchGuard Technologies stayed firmly in second place, according to VARs; category-leading scores in Support and Partnership translated into a double-digit leap in reseller loyalty. In terms of unit sales, WatchGuard was the worldwide leader in UTM security appliances priced between $1,000 and $2,999 in Q2, IDC reports.

Rounding out the top three vendors is Cisco Systems, a category newcomer, whose ASA 5500 family of UTM appliances, introduced in May, incorporates security functions already found in other products, with IPSec and SSL VPN functions thrown in.

Those rankings appear in line with a recent survey by New York market researcher TheInfoPro, which shows that IT professionals want a single appliance that includes security functions from multiple vendors.

That's a big attitude change from last year, TheInfoPro maintains, when IT managers were leery of putting all of their software eggs into one hardware basket. Interestingly, 55 percent of TheInfoPro's respondents now say they want functions on a single security appliance to be from more than one vendor, while only 31 percent prefer a single-vendor solution. That preference could account for VARs' rating higher those vendors whose security appliances are open to mixing and matching software.

Other goings-on in the security-appliance market include the advent of products based on x86 servers and off-the-shelf operating systems, such as Linux and OpenBSD. That has helped drive the cost of security appliances down--just in time to meet smaller customers' wakening demand for protection. Such customers have come to understand that they may be too small to be targets for hackers, but no one is too small for worms, phishing exploits and other random attacks.

"Most of our customers have 25 employees or fewer," says Scott Neumann, president of systems integrator AOS Web-Com in Lakewood, N.J. "Every one of them is concerned about phish and e-mail viruses. They are very receptive to low-cost, simple and effective appliance solutions."

Finally, VoIP complicates security management, creating yet another opportunity for VARs who offer security appliances. In particular, midsize companies in the 500- to 999-employee range are the most concerned with VoIP security issues, according to an In-Stat survey. Security appliances adapted to VoIP and priced for SMB customers, such as WatchGuard's Firebox X series of UTM appliances, are doing very well with VARs and their customers.

The security-appliance industry is still young, and vendors have a number of channel issues to work out. This year's ARC ratings reflect VARs' overall satisfaction with appliance vendors' product innovation, and their desire for improved vendor support and partnership programs. Second-tier vendors can improve their loyalty ratings and gain market share among VARs by devoting as much resources to channel development as they do to product innovation.