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The Virtual Private Network (VPN) Market size is forecast to increase by USD 47.82 Billion at a CAGR of 16.28% between 2023 and 2028. The market trends indicate a significant rise in the adoption of VPN solutions across diverse industry verticals, driven primarily by the need for enhanced network security and the surge in demand for remote accessibility. VPNs serve as encrypted tunnels for data transmission over the Internet, ensuring both speed and security, thus addressing critical business concerns. With the increasing prevalence of remote work, especially catalyzed by the COVID-19 pandemic, the demand for VPN connections has skyrocketed. This shift towards remote work setups not only offers cost advantages but also necessitates robust IT & Telecommunications infrastructure to support virtual workforces.
Consequently, there's a notable surge in the VPN market, particularly in the remote access segment, as organizations prioritize enabling secure connections for their remote employees. This trend is expected to persist, further driving the global market growth in the coming years.
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The market share growth by the commercial segment will be significant during the forecast period. The commercial segment held the largest market share in the virtual private network market in 2023. The commercial segment is expected to grow significantly during the forecast period owing to the increased focus on creating a secure networking environment for enterprises and an increase in the number of security breaches related to personal data and more serious cyber threats.
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The commercial segment was the largest and was valued at USD 11,692.72 million in 2018. Business users who are trying to build trust with their customers can benefit from VPN solutions. Other desirable characteristics of VPN, which are expected to drive the adoption of virtual private network solutions in the commercial segment, include cost-effectiveness and fault tolerance, as well as redundant resource availability. The growing use of remote devices at the workplace further fuels the demand for VPNs in the commercial segment which in turn increases the market demand. The growing use of laptops and other personal devices to connect to corporate networks from any location is expected to fuel the growth of VPN solutions in the commercial segment, which, in turn, will fuel the growth of the global market during the forecast period.
Multi-protocol label switching (MPLS) VPN has developed as a better option when compared to VPNs based on integrated services digital network (ISDN) and analogue lines by enabling more secure and faster communications. A VPN should have the uninterrupted service accessibility that enterprises require. Simultaneously, enterprises also need to protect sensitive customer data and other company information that is stored on their corporate servers. Through an MPLS VPN, a business secures its capability to transmit data and use real-time application services besides unifying its video, voice, data, and mobility communications with better performance than on the public Internet. Owing to these benefits, enterprises are investing significantly in MPLS VPN solutions, thereby contributing to the growth of the global market through the MPLS VPN segment during the forecast period.
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North America is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Multi-protocol label switching (MPLS) VPN has developed as a better option when compared to VPNs based on integrated services digital network (ISDN) and analogue lines by enabling more secure and faster communications. A VPN should have the uninterrupted service accessibility that enterprises require. Simultaneously, enterprises also need to protect sensitive customer data and other company information that is stored on their corporate servers. Through unified class-of-service (CoS) and any-to-any connectivity, the improved performance of enterprise applications is guaranteed, which is essential for real-time applications, including video, text, and voice. Single-operator administration and control is another benefit of MPLS-based VPNs.
Consequently, MPLS VPN is designed and developed as an essential dynamic networking platform with all the performance, security, flexibility, and uptime guarantees needed to handle any-to-any traffic patterns typical to current networks. Owing to these benefits, enterprises are investing significantly in MPLS VPN solutions, thereby contributing to the growth of the global VPN market through the MPLS VPN segment during the forecast period.
The market is witnessing robust growth, primarily propelled by the rising adoption of VPN solutions across various sectors. One notable trend shaping this market is the emergence of remote accessibility as a crucial aspect of modern work environments. With the increasing reliance on mobile and wireless devices, organizations are turning to VPNs to facilitate secure connections for remote workers. However, amidst this growth, challenges persist, particularly the threat from open-source VPN solution providers.
As organizations seek to enhance data security while embracing remote access and cloud computing, they face the dilemma of choosing between proprietary and open-source solutions. Additionally, data security concerns and the lack of virtualization skills pose hurdles in effectively deploying VPNs, especially in private cloud adoption scenarios. To address these challenges, stakeholders must prioritize comprehensive security measures and invest in enhancing their virtualization capabilities
The market growth analysis underscores the rising adoption of VPN solutions across diverse industry verticals, fueled by the inherent advantages they offer, including speed and security. Businesses, particularly in the IT & Telecommunications Industry, are increasingly embracing VPN solutions to safeguard their critical data and ensure uninterrupted flow of business operations. VPNs provide reliable service quality, mitigating concerns related to packet loss and maintaining data integrity. Enterprises invest in VPNs primarily due to security concerns, aligning with regulatory frameworks such as the General Data Protection Regulation. These solutions encrypt device connections to networks over the Internet, ensuring secure data transmission. Within the software segment, VPN clients and providers play pivotal roles in facilitating secure browsing and protecting online privacy for individuals and organizations alike. Such trends are indicative of robust market growth and forecasting with promising revenue share projections across the IP and MPLS segments.
However, VPNs are like tunnels; end-users send their data through this tunnel, where it is encrypted, while at the end of the tunnel, the data is retrieved and metaphorically wrapped in a blanket of the organization's security measures. Thus, VPN solutions are finding higher adoption across various industry verticals, which, in turn, will drive the growth of the global market during the forecast period.
The surge in demand for remote accessibility is an emerging phenomenon that significantly influences market growth. The increasingly digital landscape, exacerbated by the COVID-19 pandemic in 2020, has compelled a multitude of employees to transition to remote work settings. This trend, driven by the Individual Segment seeking flexibility and convenience, has prompted organizations to reconsider their operational strategies. Recognizing the cost efficiencies inherent in remote setups, many employers are now contemplating a permanent shift towards remote work environments. This paradigm shift underscores the importance of market forecasting to anticipate and adapt to evolving workplace dynamics. Amidst these changes, the IP Segment plays a crucial role in facilitating secure connections, with VPN Providers offering essential services to ensure seamless remote access. As organizations navigate this transition, strategic market research and growth initiatives are imperative to capitalize on emerging opportunities and address evolving needs effectively.
In order to enable such a virtual workforce, VPN connections are required for virtual workers and are often the first step taken by the IT department of a company which can result in virtual private network market expansion. A growing number of remote startups and enterprises are expected to fuel the growth of VPN solutions, which, in turn, will drive the growth of the global market during the forecast period.
Threat from open-source VPN solution providers is a significant challenge hindering the market growth. The presence of many open-source VPN solution providers is one of the major challenges in the virtual private network market. Solutions such as Libreswan, OpenVPN, and OpenConnect enable enterprises to use VPN functionality free of cost. Moreover, the virtual private network (VPN) market has many open-source companies that provide a range of VPN tools and applications. A combination of multiple products from various open-source companies can cover almost all the functionalities provided by on-premises or cloud VPN companies.
In addition, Open-source VPN is becoming increasingly popular in developing economies such as India and China, as most small-scale enterprises in these economies cannot afford to invest in expensive on-premises and cloud-based VPN solutions which can limit the virtual private network market growth. This, in turn, will negatively impact the growth of the global market during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
AirVPN - The company offers VPN-network services which is designed to provide a block list while protecting from internet ads, adware, trackers and malicious sources.
Alphabet Inc. - The company offers VPN-access service which is designed to encrypt online activities and provide extra layer of protection across Android, iOS, windows and Mac devices.
Array Networks Inc. - The company offers VPN-gateway service which is designed to provide secure remote access to applications, desktops, shared files, networks, and websites from broad range of remote and mobile devices.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
In the market, various segments cater to different needs, from solution and remote access to cloud services. Technologies like Asynchronous Transfer Mode (ATM) and Frame Relay ensure secure data transmission amidst data security concerns and the proliferation of mobile and wireless devices.
Despite concerns about lack of virtualization skills, the market witnesses private cloud adoption across industries like BFSI and telecom. Services encompass extranet connectivity and site-to-site capabilities, emphasizing control, reporting, and administration features crucial for cybersecurity.
Cloud-based deployment offers flexibility with virtual private clouds and virtual servers, optimizing storage, networking resources, and business applications. Within US industries, VPNs ensure central control over remote workers and safeguard against cyberattacks through cloud-based security solutions.
Regulation and compliance, including GDPR, drive demand for data management and censorship solutions. Software, individual, and on-premise segments cater to diverse user needs, ensuring data privacy and network encryption for secure connection and privacy protection.
VPN services and providers play a crucial role in enabling secure communication and browsing, safeguarding digital privacy and facilitating anonymous browsing in an era of heightened internet security concerns.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Market Scope |
|
Report Coverage |
Details |
Page number |
161 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 16.28% |
Market Growth 2024-2028 |
USD 47,825.44 million |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
15.3 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 30% |
Key countries |
US, Canada, China, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Absolute Software Corp., AirVPN, Alphabet Inc., Array Networks Inc., Check Point Software Technologies Ltd., Cisco Systems Inc., Cloud Software Group Inc., Gen Digital Inc., Huawei Technologies Co. Ltd., International Business Machines Corp., Juniper Networks Inc., Kape Technologies Plc, McAfee LLC, Microsoft Corp., NCP engineering GmbH, Nord Security, Oracle Corp., Proton AG, Sectra AB, and Ziff Davis Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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