IDC: The size of China's IT security hardware market is expected to decrease by 0.9% year-on-year in 2023.

The latest "2023 Fourth Quarter China IT Security Hardware Market Tracking Report" from IDC shows that the overall revenue of China's IT security hardware market in the fourth quarter of 2023 is approximately 9.12 billion RMB (about 1.27 billion USD), a year-on-year decrease of 5.5%. By the end of 2023, the annual size of China's IT security hardware market reached 22.48 billion RMB (about 3.16 billion USD), a year-on-year decrease of 0.9%. According to IDC's definition, the network security hardware market includes Unified Threat Management (UTM), UTM Firewall, Security Content Management (SCM), Intrusion Detection and Prevention (IDP), Virtual Private Network (VPN), and Traditional Firewall. Based on IDC data and market analysis, the following points summarize the performance of China's security hardware market in the fourth quarter of 2023: - The growth rate of China's security hardware market in 2023 was lower than expected, with an annual year-on-year decrease of 0.9%, lower than the 2.9% year-on-year growth in 2022 (calculated in RMB). - The UTM Firewall market size still ranks first, with a total market size of about 76.8 billion RMB in 2023. - With the support of "Commercial Encryption" related policies, VPN has become the fastest-growing sub-market in China for the whole year, while IDP and Security Content Management have seen a more significant decline in size due to macroeconomic factors, product replacement, tightening budgets, etc. - From an industry perspective, the overall trend of tightening budgets in government and enterprises has not changed, and demand is concentrated in specific sectors such as electricity, petroleum, insurance, securities, and new energy vehicle companies. IDC China's senior analyst Zhang Xueqing stated that at the beginning of 2023, some projects that were delayed due to the impact of the epidemic in the previous year were implemented in the first half of 2023, leading to a slight rebound in market growth. As the year progressed, despite the gradual fading of the unfavorable factor of epidemic control, China's security hardware market only achieved a 1.4% year-on-year growth in the third quarter, and a rare market contraction of over 5% occurred in the fourth quarter, which played a decisive role in the overall year. IDC believes that aside from external economic factors, challenges that the security hardware market is facing include weakened compliance drivers, increasing market saturation, product form changes, and others. Looking ahead to 2024, there will continue to be rigid demand for hardware products from users, and market opportunities will become more concentrated, which is the common direction for security vendors to focus on.