Press release
Virtual Private Network (VPN) Market Forecast 2018-2023: Microsoft, Private Internet Access, CyberGhost, NordVPN, Purevpn, IPVanish, Golden Frog, Buffered VPN, SaferVPN, NetGear
Virtual Private Network Market – Vertically integrated industries such as finance, healthcare are expected to drive the market. Retail expected to be the most potential industry growth areaMarket Scenario of the Global Virtual Private Network Market:
A virtual private network (VPN) allows the user privacy and security over a public network. VPN provides confidentiality due to data encryption, prevents unauthorized access and integrity of message which helps in detecting tampering with transmitted messages. The global virtual private network market is valued at USD 15.27 billion in 2016 and is projected to generate a CAGR growth of 18.22% over the forecast period of 2016 to 2022.
Regional analysis of the global virtual private network market:
North America is the market leader across the world accounting for USD 7.37 billion in 2016. North America is dominated by the U.S. fed by the increasing rate of cybercrime, presence of strong demand due to its service and I.T. led industry pattern, and demand for high end services and privacy. North America is dominating the market and has generated. Europe is expected to be the second largest market driven by nations such as U.K. Germany, France and the Scandinavian nations of Iceland, Norway, Finland and others.
Asia Pacific region led by China, Japan, and India is expected to be the fastest growing market for virtual private network propelled by huge demand. The Middle East and Africa market is expected to generate moderate demand led by the government sector.
Key Players of the global virtual private network market:
CyberGhost S.A., IPVanish, Microsoft Corporation, N`tGear, Inc., Private Internet Access, Golden Frog, SaferVPN, NordVPN, Purevpn, Buffered VPN and among others.
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Market Dynamics of the Global Virtual Private Network Market:
Drivers
Privacy and security are the most critical drivers of the market. The growing practice of remote operating especially accessing the corporate intranet from a location outside the office is adding strength to the demand for such services. Globalization and cross geographic nature of business, need to circumvent censorship and geo-restrictions are other factors driving the growth for VPN. The growing confidentiality of information such as customer information, company projections are indirectly supporting the demand for VPN.
Technological and product development coupled with new business models such as dynamic pricing on the basis of data volume will enable companies to scale their business in a better way. Technological advancements such as Virtual Private LAN Service (VPLS), Layer 2 Tunneling Protocols (L2TP), so as to overcome limitations of traditional VPN systems utilizing the point-to-point topology are expected to generate greater confidence among customers for VPN. Improving encryption methods will be a further boost to the market.
Restraints
Slow speeds are the critical barrier which needs to be surmounted as it’s the greatest weakness of VPN. Advancements in network sniffer and deep packet inspection technologies are a threat as it directly undermines the system. Technical limitations include lack of support for broadcast domains resulting in layer 2 or broadcast packets based systems such as NetBIOS and Windows networking. However Virtual Private LAN Service and layer 2 tunneling protocols development is expected to eventually eliminate this limitation.
Competition from fixed leased-line technologies such as ATM and frame, which offer better quality and security, is another threat to the market. Issues with internet protocol such as multiple points of failure limiting performance and reliability, latency and bandwidth sensitive applications such as voice and video are still a significant issue with the VPN technology.
Industry Mergers and Acquisitions
Symantec with its acquisition of secure Virtual Private Network (VPN) SurfEasy has charged on Cisco systems the dominant player in a $38.5 million deal. Thus the market players are targeting to become end-to-end integrated solutions.
Another business strategy has been a shift away from the software only solutions to appliance product lines which eliminates the need for installation. This has resulted in partnerships with hardware vendors such as the partnership of Check Point Software Technologies with Nokia. Thus such collaborations have resulted in specific products designed to run the partners software.
This is beneficial to both partners as the software vendor gets a guaranteed business source, while the hardware vendor has dedicated software to support its products and also avails the expertise which it may not possess. The customers benefits by not having to install security software themselves.
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Segmentation of the global virtual private network market:
Type - Hosted, IP, Multiprotocol Label Switching, Cloud and others. The global virtual private network market by type is led by the hosted segment followed by IP user type in 2016. Multiprotocol label switching segment is expected to be the fastest growing at a CAGR of 20.5%.
Deployment - On-Premise, On-Cloud
Products - Routers, Switches, Firewalls and others.
End users - Government, Telecommunication, Manufacturing, Healthcare, BFSI, Utilities and others.
The VPN market is traditionally dominated by the financial and Government sectors due to their larger buying power, and greater need for security of data and communications. The scenario however is changing in the favor of health care due to growing number of laws and acts such as the Health Insurance Portability and Accountability Act (HIPAA). The government sector leads the market and is expected to generate a growth of 19.2% CAGR.
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