Research shows growth of European MPLS/IP VPN market

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New analysis from tech research and consultancy firm Frost and Sullivan has indicated that the market for MPLS/IP VPN is on the rise, with demand for services surging and revenue for the sector growing significantly as a result.

Their research has found that the total revenues earned in the MPLS/IP VPN market in Europe exceeded US$7 billion dollars in 2014 for the first time. It further predict that growth in market would continue at a rate of around 13% a year leading to estimated revenues of just over US$14.5 billion by the year 2020.

MPLS/IP VPN’s is a group of methods for using multiprotocol label switching (MPLS) to establish a virtual private network (VPN).

The MPLS networking technology is both more scalable and more flexible than other networking technologies on the market which allows users to add new sites to their existing networks without the usual complications this would involve. As the MPLS/IP VPN services can also be overseen directly by the service provider, the usual challenge of routing and managing complex networks are taken away.

Commenting on the report, Frost & Sullivan Digital Transformation Research Analyst Shuba Ramkumar said “With customers migrating to MPLS VPNs, focus is increasing on tools that monitor network and application performance… These tools are critical for successful MPLS/IP VPN implementation as customers seek greater transparency over the applications they wish to run on the network."

The main markets for MPLS/IP VPN’s within Europe continue to be the big Western European economic powerhouses of France, Germany, and the UK. It is predicted that growth in these key markets will remain consistent. However there is also expected to be a big spike in demand from the rapidly development new European markets of Eastern Europe, and it is believed that this will push the demand as high as the Frost Report is predicting.

The key players in the MPLS/IP VPN market in Europe continues to be the big telecoms companies such as Deutche Telekom, Telefonica, British Telecom, and Telecom Italia. However there is now a growing level of competition from service providers who operate right across the region such as Orange, Vodafone, and TalkTalk.

The report notes that increased competition in the sector is forcing providers to attempt to differentiate the services they provide in an attempt to retain and expand their market share. This has seen providers upgrading their network technology with new software-defined networking (SDN) software automation as well as putting together their network offers with IP-based voice and security services.

An increase in the demand for services is thought to be fuelled by the desire of enterprises for hybrid network deployments which is leading new network designs which incorporate multiprotocol label switching (MPLS), Internet and Ethernet. These hybrid networks are expected to be able to provide seamless connectivity and flexibility and to deliver a consistent service for all users.

In the coming years, with companies increasing moving towards cloud-based solutions, it is also expected that MPLS/IP VPN’s will be able to provide secure access to the full range of cloud-based software as well.

"Secure access to cloud services is central to ensuring reliable cloud environments," noted Ramkumar in the company statement which accompanied the report. "Being a managed private network, MPLS/IP VPN is the preferred mode of cloud connectivity for enterprises."

For those who are keen to read the full report, it is available to buy for the princely sum of US$4,950 here. If that is a little on the steep side, you can gain access to the brief executive summary by entering a few details on their website here.

The report serves to highlight the growing demand for genuinely secure internet access by companies large and small as well as individuals. Corporate and individual VPN’s are intended to serve just that purpose and as we read more and more stories about corporate data hacks and intelligence services and other online operators looking to monitor and access our data, so awareness of the protection that a VPN can offer us grows.

Europe has always been a strong market for such services and as the Frost report indicates that is expected to grow over the coming five years. However, it can be expected that similar patterns will emerge in the coming years across most of the developed worlds, and in every state where such protections are permissible without backdoor access having to be built in.

Certainly in the US, awareness and take-up of such services can be expected to mirror that of Europe in the years ahead, despite reassurance from Government and others about the level of online privacy and security they enjoy.

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