European Multiprotocol label switching (MPLS)/IP VPN market revenues reached more than $7.02 billion in 2014 and is estimated to reach $14.63 billion in 2020, according to a new analysis from Frost & Sullivan. The growth is driven by enterprises that are desiring hybrid network deployments as it is easier for customers to add new sites to their existing networks that enables any-to-any connectivity. Additionally, as MPLS/IP VPN services are fully managed by the service provider, enterprises do not have to deal with the challenges of routing and managing complex networks, said the market research firm.
Although MPLS/IP VPN has proved a winning combination, Frost & Sullivan expects the economic advantage offered by standalone IP VPN, along with the opportunity it provides to enable additional security, is expected to emerge as a competitive threat to MPLS VPN. In locations where Ethernet is available, IP VPN is emerging as a viable option for enterprises' any-to-any connectivity needs. Over Ethernet locations, virtual private local area network (LAN) services (VPLS) is also another emerging technology that rivals MPLS. Frost expects both MPLS and VPLS will continue to co-exist in enterprise wide area network (WAN).
As the same time, enterprises have been accelerating the migration of mission-critical applications to the cloud, and this is intensifying the demand for MPLS/IP VPN connections. Service providers are capitalizing on the growing need for secure cloud connectivity by building secure MPLS-based network connections into internal or third-party data centres.
Shuna Ramkumar, Digital Transformation Research, Frost & Sullivan
Secure access to cloud services is central to ensuring reliable cloud environments. Being a managed private network, MPLS/IP VPN is the preferred mode of cloud connectivity for enterprises.
