News > Vertical in the News
 

One Million U.S. Customer Sites Waiting for Dedicated IP/MPLS VPN Services

According to the latest research conducted by Vertical Systems Group, the number of Dedicated Internet Protocol/MultiProtocol Label Switching (IP/MPLS) virtual private network (VPN) customer sites in the U.S. will exceed the number of base installations of Frame Relay/ Asynchronous Transfer Mode (ATM) network services within the next eighteen months and will reach about one million by 2011.

According to Vertical Systems, “Dedicated access VPNs include enterprise customer sites that connect to network-based IP/MPLS or site-to-site IP VPN services at access speeds ranging up to more than 1 Gbps.”

Vertical Systems analyzes each type of VPN service on criteria such as site counts and revenue for seven access speed segments.

The research predicts that by 2009, the number of Dedicated IP/MPLS VPN installations will be almost equal to that of Frame Relay/ATM installations. Thereafter, Dedicated VPN installations will surpass Frame Relay/ARM installations.

Vertical Systems estimated that in 2011, the number of Frame Relay/ATM installation will be reduced to about two third of the present value. Further, by 2012, it will reduce to about half a million, half of the number of Dedicated VPN installations.

The report notes that, “Enterprise network migration from legacy services to managed VPNs has accelerated as a result of surging IP traffic and subsequent requirements for more bandwidth.”

“Enterprise site counts are a clear indicator of customer demand trends, and one million is a benchmark level for the U.S. Dedicated VPN market. The mix of access speeds that customers are purchasing for these sites is also important for tracking Layer 2 and Layer 3 service bandwidth requirements and projecting VPN provider revenues, " said Rosemary Cochran, principal at Vertical Systems Group.

According to Cochran, T1 carrier, the most popular digital transmission service in the U.S, have been the choice for both Frame Relay and Dedicated IP VPN services. T1lines that originally used copper wires, now use optical and wireless media.

"Nearly 95 percent of VPN customer sites connect using T1 or fractional T1 (FT1), DSL or lower speed access rates; however the fastest growing speeds are higher bandwidth, higher-priced T3/FT3, very high rate digital subscriber line (VDSL), optical carrier with a speed of 155.52 Mbps or more (OC-3+), and high speed business Ethernet or business cable connections," also said Cochran.

Complete article on TMCnet
Article also found at TMCnet