IP VPN equipment market to double this year

The Internet protocol (IP) virtual private network (VPN) market looks set to explode this year. According to Gartner Group predictions IP VPN equipment market will reach just under US$3 billion by the end of 2002.

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By  Zoe Moleshead Published  May 12, 2002

The Internet protocol (IP) virtual private network (VPN) market looks set to explode this year, according to Gartner Group predictions. The research house is expecting the IP VPN equipment market to reach just under US$3 billion by the end of this year, a 45.7% increase from the $2.05 billion accumulated in 2001.

"The market for managed IP VPN solutions from carriers has enormous potential and will become increasingly important," said Caroline Jones, analyst, worldwide telecommunications and networking group, Gartner Dataquest.

"Small-to-midsize businesses desire to benefit from the convenience and cost-effectiveness of IP VPNs without the set-up, support and management problems. Most businesses in this sector do not have sufficient in-house expertise to support and manage a geographically dispersed VPN on a '24x7' basis," added Jones.

With Gartner Group citing the costs benefits of using the Internet for communications as opposed to wide area network access via leased lines, frame relay or ATM, the research group is anticipating that the market will reach $4.7 billion by 2006.

"Security continues to be a major issue for the uptake of IP VPNs in every region and those business sectors where data is highly sensitive," explained Jones. "To benefit from VPNs’ great potential, service providers need to remember that a security solution for one region may not succeed worldwide."

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