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September 15, 2003
Worldwide revenue for SSL hardware hit US $9 million in Q2-03

UNITED STATES -- According to Infonetics Research's quarterly market share and forecast service -- SSL and intelligent traffic delivery products, worldwide revenue for layer 4-7 switches and load balancers reached US $118 million in Q2-03, a small drop from Q1-03, and will likely grow at low single digits through Q1-04 and hit US $545 million in 2006. Worldwide revenue for dedicated SSL hardware, including dedicated SSL appliances and SSL server peripheral cards, hit US $9 million in Q2-03, up from US $8 million in Q1-03, and is likely to touch US $42 million by 2006.


Q2-03 layer 4-7 switch/load balancer market highlights:

  • Cisco is the worldwide leader in layer 4-7 switch/load balancers without SSL, with 40 percent revenue market share and 46 percent port market share;
  • F5 is the worldwide leader in layer 4-7 switch/load balancers with SSL, with 47 percent revenue market share and 45 percent port market share; and
  • There was strong revenue and unit shipment growth across all product categories in North America. It has 47 percent of the layer 4-7 switch/load balancers without SSL revenue, and 54 percent of the layer 4-7 switch/load balancers with SSL revenue, and EMEA (27 percent and 24 percent, respectively) indicating improved spending patterns in these geographies after weak results in Q1-03. Results for APAC in Q2-03 were mixed, which is partially due to the slowed economic activity due to SARS

Q2-03 SSL hardware market highlights:

  • The clear winner in the worldwide dedicated SSL appliance category was Nortel, who captured 44% revenue market share and 26 percent unit share;
  • nCipher leads in the total server peripheral card category, and HP maintains second place for both revenue and unit shipments; and
  • North America, which already accounts for 63 percent of worldwide revenue share, will see increased spending for SSL acceleration hardware in 2003, particularly for FIPS certified dedicated SSL appliances and server peripheral cards; the US government pulled back the curtains on its IT budget, and a significant part of that budget is earmarked for security.

Neil Osipuk, lead analyst of the report, said: "We expect the layer 4-7 switch/load balancer market to be mixed throughout 2003, with revenue from layer 4-7 switch/load balancers without SSL declining, and revenue from layer 4-7 switch/load balancers with SSL growing strongly. Given the expected low growth in the layer 4-7 switch/load balancer market, companies like F5 are looking to higher growth opportunities in adjacent markets, which is part of the motivation behind their recent acquisition of the SSL VPN company uRoam. Nortel has also added SSL VPN functionality to its Alteon portfolio."

SSL and intelligent traffic delivery products track server peripheral cards, dedicated SSL appliances with or without FIPS, layer 4-7 switches and load balancers with or without SSL. Updated quarterly, the forecasts cover all regions including North America, EMEA, Asia Pacific, and CALA. Companies tracked in this service include AEP, Broadcom, BlueCoat, Cisco, Dell, F5, Foundry, Hewlett-Packard, nCipher, NetScaler, Nortel, Radware, SonicWALL, and others.

Contact:
Infonetics Research

Tel: +1-408-298-7999, Ext: 227
neil@infonetics.com
www.infonetics.com





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