Network management and security – the category that includes VPNs, gateways and firewalls – is on the up as businesses update their networking infrastructure to enable their employees to work from home. This is especially true of SMBs, many of which did not previously have the infrastructure in place to allow remote working. The change is even more noticeable given that this segment of the market had been in constant decline throughout 2019 and into January 2020.
"The current situation is also proving positive for the Enterprise software segment, with virtualisation and security software benefitting", said Gurvan Meyer, Business Enterprise Analyst at CONTEXT. "The need for more endpoint security licenses, networking security licenses, and virtual machines is pushing up sales in those categories."
The other side of this story is the reduced demand for IT infrastructure as confinement and lockdowns have an increasing impact on sales with those of servers and network switches showing more marked signs of decline in week 12. However, confirmation of whether or not this is a real trend will come in the next few weeks – the end of the quarter could bring a few deals that make up the loss. Even so, business closures are leading to a marked break in infrastructure investment. For example, we understand that resellers in Southern Europe cannot reach their traditional clients who are closing or, at best, re-focusing their resources into managing the crisis rather than investing in IT infrastructure. We are also seeing the same decline in demand for wireless infrastructure as offices empty and the installation of wireless access point networks is delayed or cancelled.
"Looking forward, software and collaboration products should continue to thrive, and businesses are also likely to need more networking equipment to enable and optimise homeworking. Conversely, there is a worry that demand in the infrastructure segment will slow further as the confinement rules remain at the current levels."
Security Software revenues year-on-year Week 12 2020
Germany +158.4%
United Kingdom +105.7%
France +222.5%
Italy +49.0%
Switzerland +185.3%
Spain +15.1%
Netherlands +34.0%
Belgium +80.9%
Norway +25.5%
Sweden +159.5%
Denmark +211.1%
Poland +183.1%
Russia +38.8%