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July 22, 2001 — (WEB HOST INDUSTRY REVIEW) — Internet protocol virtual private networks (VPNs) have
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become a mainstream technology, one that so far has proved immune to the
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continuing economic woes, according to a recent report by IDC.
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The report says that demand for these services has never been higher and is
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on the verge of exploding. IDC forecasts revenue generated from IP VPN
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equipment will more than triple from $2.3 billion in 2000 to $7.5 billion in
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2005.
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“IP VPNs are attractive for their low cost, ubiquity, and the flexibility
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they provide in ad hoc connectivity,” said Jason Smolek, an analyst with
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IDC’s IP VPNs research program. “Companies that deploy IP VPNs don’t need to
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build private lines between their sites, and for organizations with multiple
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sites, this represents huge cost savings in terms of capital and time. It
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also makes an IP VPN an excellent vehicle to e-enable a company because
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business processes can be linked without resorting to expensive
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infrastructure investments.”
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For the next few years, IP VPN-enabled equipment should be more popular than
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dedicated IP VPN equipment. However, the latter is currently growing faster.
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While IP VPN-enabled equipment revenue will increase at a compound annual
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growth rate of 24% from $1.7 billion in 2000 to $5.1 billion in 2005,
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dedicated IP VPN equipment will earn a CAGR of almost 34% during the same
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time frame.
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Routers and firewalls account for the largest share of the IP VPN-enabled
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equipment segment. Together, they will account for more than 70% of the
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segment’s revenue through 2005.
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IDC published these results in “Worldwide IP VPN Equipment Market Forecast
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and Analysis, 2000-2005.” To purchase this report, call IDC’s PR hotline at
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508-988-7988 or email ctoffel@idc.com.
