At one time, the market for technical appliances such as firewalls, Application Delivery Controllers, Load Balancers and DDoS Mitigation hardware was the “in” thing to do, and many folks made a great living at it. Unfortunately, all highly profitable business ventures come to an end, especially when you have Amazon as a competitor.
For a few appliance manufacturers, especially those with a narrow product line, the writing is on the wall. AWS is a $7B+ annual business growing somewhere in the ball park of 81% yearly. How much will Amazon do in 2016? $11B or $13B. How about in 2017? $16B or $20B. Whatever the number is – it will be staggering, and a lot of it will come at the expense of existing hardware vendors like F5 Networks, Barracuda Networks, Radware, Arbor Networks, etc.
Would it be crazy to say that “99% of the ADC + Load Balancing + DDoS Mitigation + Firewall Appliance” will vanish as their functionality moves to the cloud. The 1% will be the cloud providers that buy hardware appliance to service their thousands of enterprise customers. And not only must the appliance manufacturers worry about Amazon, but also CDNs, Cloud ADC’s, Edge Security CDNs, and so on. It would be great to see at least one appliance manufacturer pivot completely to a Cloud / SaaS model in 2016.