The number of ‘do-it-yourself’ (DIY) IP Virtual Private Networks (VPNs) in Western Europe is set to decline in comparison with managed or outsourced IP VPNs. According to IDC’s latest study of the market, the number of DIY IP VPN connections in Western Europe – 0.5 million at the end of 2001 – will rise by 24 per cent in compound annual growth rate (CAGR) to nearly 1.5 million at the end of 2006. Meanwhile, the market will see a 51 per cent CAGR increase in the number of managed IP VPN connections from 0.4 million at the end of 2001 to 3.2 million in 2006.
“As the market for IP VPN service provision becomes more competitive, service provider offerings will make greater use of a wide range of connectivity, management, and pricing options, as well as become more attractive in terms of the performance, quality of service, and value added services offered,” explains Chris Drake, a senior analyst on IDC’s European IP Services programme.
Drake argues that “those service providers with the ability to offer flexible IP VPN solutions will have an advantage over those with limited connection, payment, and management options.”
The predicted growth in the uptake of managed IP VPN services is based on several factors, including the extent to which managed service offerings are becoming more prevalent, affordable and attractive in terms of how they are offered and what they are able to support.
According to IDC, a recent wave of new managed IP VPN product launches reflects a trend among service providers to broaden their existing IP VPN offerings. Increasingly, providers are offering customers a full range of services, including managed premise-based services and managed network-based services (increasingly based on Multiprotocol Label Switching MPLS). Central to this process of service consolidation is the desire among suppliers to provide as flexible a range of IP VPN services as possible.
IDC’s study on European IP VPN Services, 2001-2006, assesses the way in which the market for IP VPNs in Western Europe is developing.