Due to declining input costs, prices have decreased slightly despite increased demand for firewall hardware
Los Angeles, CA (PRWEB) September 16, 2014
Network firewall security equipment has a buyer power score of 3.5 out of 5. Favorable pricing trends and low market risk benefit buyers. However, the market's structure significantly lowers the buyer score. Firewall hardware requires a wide variety of semiconductors, computer chips and microprocessors. Prices for these inputs have steadily declined. As a result, says IBISWorld analyst Andrew Yang, suppliers have been able to lower their production costs and pass these savings on to buyers, resulting in very stable prices during the three years to 2014.
Buyers also benefit from low market risk. Many firewall hardware suppliers have experienced healthy revenue growth, high profit margins and low bankruptcy risks. Supply chain risks are also low because most suppliers are global companies that have well-established supply chains to procure the inputs needed to manufacture firewall hardware, continues Yang. As a result, buyers can expect reliable and steady access to these products.
However, the market's structure significantly lowers the buyer score. Product specialization and market share concentration are high. Network firewall security equipment is customized for each buyer and is deeply integrated with the buyer's existing networking products and software programs. This raises switching costs and increases the risk of buyers getting locked in with their suppliers. In addition, there are a limited number of suppliers from which buyers can choose. Major suppliers include Dell, Cisco and Intel Corporation.
With increased use of and access to the internet, firewall hardware has become a necessity for most large organizations. There are no substitutes as powerful or as cost effective as firewall hardware. As the economy improves and companies gain increased access to the internet, demand is expected to increase significantly, giving suppliers more pricing leverage. In response to these rising prices, buyers should consider purchasing soon and signing long-term supply contracts. For more information, visit IBISWorld’s Network Firewall Security Equipment procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of firewall network security equipment (also known as firewall hardware). Firewall hardware protects the buyer’s computer, information and data from outside parties. Firewall hardware provides protection by filtering information and data coming from the internet. This report focuses on hardware solutions used by large enterprises and excludes routers and software solutions.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.