Users and providers warming to IP VPNs

The future is looking increasingly rosy for virtual private networks (VPNs) based on the Internet Protocol (IP) standard, with user organisations and service providers set to benefit from their adoption over the next few years, according to the latest research.

Global network operators such as AT&T, BT/Infonet, C&W, Equant, MCI, NTT and Sprint - all regularly in the news with IP VPN contract wins - will see strong demand as organisations typically migrate their private networks from Frame Relay and ATM.

Analyst house Frost & Sullivan forecasts the IP VPN market in Europe will grow from being worth €2.73bn in 2003 to €8.56bn in 2008.

User organisations are making the switch because of the global reach of IP networks, whether private or public, connecting branch offices and mobile workers.

The research also notes that now users are more likely to be satisfied that IP VPNs can offer the right quality of service (QoS) and security.

Although telcos have had a tough few years and face increasing price pressure in several areas, the F&S reckons small business use of IP VPNs is a future growth area for providers, as well as value-added services that differentiate beyond plain connectivity.