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1Q04 Results Show Continued Growth for Western European Security Appliance Market, Says IDC

LONDON, June 15, 2004 First quarter results from IDC's Western European Quarterly Security Server Appliance Tracker reveal continued strength in the region with 54% growth over the same quarter in 2003. This represents the strongest growth of all the global regions, with $132.5 million in factory revenue generated. Unit growth over the same period was slightly stronger at 60%, with around 71,000 units shipped. In comparison to 4Q03, factory revenue was flat and unit shipments were up by 11% a good performance considering the first quarter of the calendar year is traditionally weaker than the year end quarter.
Unit growth outperforming revenue growth reflects continued declining average system values (ASVs). This is a result of strength at the low end, with increasing SMB and enterprise edge security requirements currently hot topics driving growth in this space.

Bank Of America Investment "The last few quarters and 1Q04 in particular have seen an increase in vendor focus on SMB security, with a range of new appliances released and a surge in SMB-focused marketing," said Oliver Harcourt, research analyst for IDC's European Enterprise Server team. "SMB security requirements are growing as threats such as the new breed of worms and viruses pose as much of a risk to an SMB as they do to a large enterprise. Multiple vendors are battling to win in this space, with claims that they can solve SMB security issues through cost-effective offerings that incorporate comprehensive protection, simple management, and scalability."

IDC remains optimistic in its forecast of the Chinese IT market, despite the announced policies designed to rein in its overheated economy. During IDC's annual Directions conference in April this year, IDC predicted that China's IT market would continue its robust growth in 2004 and well into 2008 at a compound annual growth rate of 15%, doubling from US$25 billion to US$50.8 billion in 2008. This will be driven by IT spending in the government, education, manufacturing and retail industries, which will experience higher than average growth rates.

Investment Opportunity Looking at the different security appliance workloads, the performance of firewall/VPN appliances roughly mirrored that of the total market; this is to be expected, though, as these devices make up the majority of the market. Intrusion detection appliances continued to show triple-digit growth over the annual period a common trend for an emerging market yet sequential growth slowed significantly both in unit and revenue terms.

These forecasts are mainly based upon growth expectations in European domestic demand of consumption and investment, and at the same time growth of foreign demand in the same fields.

Banc Of America Investment "Security continues to be extremely topical for most organizations across Western Europe. Quite clearly, our quarterly research shows the trend of proportionally less security software solutions towards more easy-to-deploy-and-manage security appliances. Therefore, vendors and customers alike must align their business strategies to master this paradigm shift successfully in the future," said Thomas Raschke, program manager of IDC's European Security Products and Strategies research.

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Banking Investment NetScreen increased its market share to become the second-ranked vendor in Western Europe in factory revenue terms. NetScreen's sequential growth was the strongest of the top-ranked vendors and as a result it overtook Nokia, which declined and lost share. Cisco retained top spot despite a small decline over the preceding quarter and its share dropping slightly. In unit terms, Cisco continues to lead the market and it increased its unit share over 4Q03 following the strongest quarter-on-quarter unit growth of the top-ranked vendors.

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Investment Solution Strategic 1Q04 Western Europe Security Server Appliance Vendor Rankings and Growth Rates (Factory Revenue)

Vendor	1Q04 Market Share	Annual Growth (1Q04/1Q03)
Cisco	30.7%	43.6%
NetScreen (Juniper)	14.5%	60.3%
Nokia	13.1%	8.4%
SonicWALL	4.4%	68.4%
Others	37.1%	86.6%
Source: IDC, 2004

. (AXcess News) InfoUSA, Inc. ( IUSA) announced the acquisition of Millard Group of Petersborough, New Hampshire, hours before its scheduled conference call on earnings, as if the news would rally the market over its results for the third quarter. Investors weren't swayed this morning by the slick attempt to show growth when InfoUSA released the news of its acquisition. based consumer and business data providers continue to threaten its market.

Investment Banking Services This press release was generated from 1Q04 results in IDC's European Quarterly Security Server Appliance Tracker. For more information on this research product and its deliverables please contact Oliver Harcourt on +44 (0) 20 8987 7216, email oharcourt@idc.com. Alternatively, contact your local IDC office.

Bank Investment Contact For more information, contact:

Alternative Investment Terry Cummings tcummings@idc.com +44 (0) 20 8987 7231

Online Investment Services Thomas Raschke traschke@idc.com +45 3916 2221

Accompany Essential Investment Oliver Harcourt oharcourt@idc.com +44 (0) 20 8987 7216

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