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In-Stat/MDR finds IP VPN equipment helping service providers grow

Network-based IP Virtual Private Network services (MPLS IP VPN, Virtual Router and Network-Based IPSec services) ar...


November 23, 2004  


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Network-based IP Virtual Private Network services (MPLS IP VPN, Virtual Router and Network-Based IPSec services) are one of the important growth areas in business networking services, according to In-Stat/MDR.

There are various types of equipment that enable service providers to offer these services.

The high-tech market research firm estimates total worldwide sales revenues for network-based IP VPN equipment in 2003 to be US$267 million.

Edge routers accounted for 51% of total sales of network-based IP VPN equipment in 2003, and multiservice switches and IP services switches had quite similar market shares.

Network-based IP VPN services move VPN intelligence to the edge of the network, as opposed to initiating tunneling at the CPE, as with CPE-based VPN services.

Most leading service providers offer at least one network-based IP VPN service for their business customers.

Henry Goldberg, a senior analyst with In-Stat/MDR, said that network-based IP VPN services enable service providers to achieve economies of scale by substantially reducing operational costs of provisioning, management and maintenance.

"MPLS IP VPN and Virtual Routing over ATM services also allow service providers to earn incremental revenues by offering classes of service for different priority applications, and enable end users to reduce costs by converging all of their voice/data/video traffic onto a single service,” he said.

The report, entitled Network-Based IP VPN Equipment: What Service Providers Want, provides examination and analysis of the four categories of equipment involved in network-based IP VPN services. They include edge routers, multiservice switches and IP services switches.