Asia-Pac’s network security market rebounds to post modest growth in Q2

The Asia-Pacific network security market rebounded to post a moderate growth of 3.2 percent in Q2 (second quarter) 2006, after a disappointing first quarter. Robust spending on network security solutions was noted in countries like Australia, China, South Korea and Taiwan, while Japan recorded a significant cutback in spending in Q2.

New analysis from global growth consulting company, Frost & Sullivan (), Asia Pacific Network Security Market Q2 2006, reveals that the market — covering 14 major Asia-Pac economies — earned revenues of U.S. $300 million in Q2 2006.

“Q2 was the first quarter of the fiscal year in some countries in Asia Pacific and many large enterprises were busy planning their IT budgets and hence, postponed IT purchases,” says Frost & Sullivan Industry Analyst Jay Tan.

However, the need for layered security and gradual infrastructure expansion in emerging markets as a result of Asia’s burgeoning economy and rapid business development continue to contribute to the increasing uptake of network security solutions.

These business expansions have given rise to a growing community of mobile workers, along with enterprises’ requirements for intensive defense and protection against zero-day threats to encourage the adoption of network security technologies in advanced countries.

“In a market that abounds with solutions, vendors’ capability to provide comprehensive security solutions at competitive pricing would be a key differentiating factor,” notes Frost & Sullivan Senior Research Analyst Arun Chandrasekaran. “Technology convergence and integration of security into infrastructure would also play a vital role.”

Both large enterprises as well as SMBs (small- and medium-sized businesses) increased their spending on network security solutions in Q2. SMB spending, in particular, grew at a faster rate mainly on the strength of investments in countries such as China, South Korea and Taiwan. Markets like Australia, Thailand and China saw a significant increase in government spending on security solutions in that same quarter.

“We expect the BFSI (banking, financial services and insurance), government and telecommunications sectors to continue to be the biggest spenders on security solutions,” adds Tan.

“Regulatory compliance acts such as J-SOX (Sarbanes-Oxley, Japan), and federal guidelines such as ACSI 33 (the Australian Government Information and Communications Technology Security Manual) and Malaysia’s GPIS (Guidelines on Management of IT Environment) are also favorably influencing the network security market,” observes Chandrasekaran. “This is because large organizations are adopting pro-active layered security measures and embarking on business continuity planning.”

The Asia Pacific Network Security Market Q2 2006 study is part of the Network Security Growth Partnership Service, which also includes research services in the following markets: secure content management and managed security services. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Analyst interviews are available to the press.




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