Due to declining input costs, prices have decreased slightly despite strengthening demand
Los Angeles, CA (PRWEB) January 14, 2015
Network firewall security equipment has a buyer power score of 3.8 out of 5, which indicates significant buyer leverage. However, the market's structure significantly hinders the buyer score. Extreme startup costs limit the entry of new major players into the market, fostering high market concentration and limiting competition. Current major vendors include Cisco, Dell, Intel and Juniper Networks. “High product specialization also harms buyer power,” says IBISWorld research analyst Kevin Young, “because firewall hardware is typically customized for each buyer and is deeply integrated with the buyer's existing networking products and software programs.” This nature 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.
Buyers benefit, however, from low market risk. “Many firewall hardware suppliers have experienced healthy revenue growth, high profit margins and low bankruptcy risks,” says Young. Supply chain risks are also low because most suppliers are global companies with well-established supply lines. A dependable supply chain has contributed to steady market pricing in the three years to 2014, benefiting buyers with the ability to budget network firewall security equipment with some degree of confidence.
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 and decreasing buyer negotiation power. Consequently, prices are forecast to rise somewhat in the three years to 2017. Buyers are advised to consider purchasing sooner rather than later and signing long-term supply contracts. Some vendors also provide maintenance and support services, and buyers can obtain additional discounts by bundling such services with network firewall security equipment procurement. 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.
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.