Prices have been declining due to falling input costs for suppliers. However, price declines have been slow due to increased demand for the product
Los Angeles, CA (PRWEB) November 19, 2014
Network security equipment has a buyer power score of 4.4 out of 5, representing a high level of negotiating power for buyers. The price of network security equipment has been declining steadily over the past three years, largely due to a drop in the price of semiconductors and electronic components. “Suppliers pay less for inputs to build network security equipment, which enables them to charge less and still maintain sizeable profit margins,” according to IBISWorld business research analyst, Andrew Krabeepetcharat. Additionally, low price volatility allows buyers to make purchasing decisions without the threat of price hikes.
Several positive factors have been benefiting buyers of network security equipment over the past three years. Moderate market share concentration encourages some level of competition among suppliers, providing buyers with more leverage for negotiating on price. The largest suppliers in the market are multinational corporations that are financially stable, reducing the risk of bankruptcy or discontinuity of services. Additionally, the market exhibits a low level of supply chain risk, further solidifying safe buying conditions of the market. Low risk in upstream markets for suppliers and stability in demand for network security equipment create a stable purchasing environment for buyers.
However, some factors reduce buyer power and limit price declines. Recent growth in private investment in computers and software has been increasing the demand for network security equipment because more businesses have been seeking to protect their new investments in technology. Also, because businesses have been conducting more transactions online, the demand for network security equipment has also been increasing as means for protecting networks from cyber attacks and data theft. “Increased demand has been keeping prices from declining at a faster pace over the past three years,” says Krabeepetcharat.
Furthermore, the highly specialized nature of these products reduces negotiating power because highly customized network security equipment is priced higher than standardized equipment and increases switching costs by making it difficult to locate a comparable supplier. Major vendors include Dell Inc., Juniper Networks and Intel Corporation. For more information, visit IBISWorld’s Network Security Equipment procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of network security equipment, which is used to prevent data theft on computer networks. Suppliers provide e-mail and web security, secure mobility, security management and secure access control options for buyers. This report does not include antivirus software.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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.