Virtual Private Network Services in Latin America

Internet protocol virtual private networks (IP VPNs) configured over MPLS platforms allow the convergence of corporate applications with high quality of service (QoS), enabling service providers to control and manage the entire network transit and their performance. This permits service providers to increase their business volumes even with fewer customers by adding value to the client's network and is encouraging top regional players with large infrastructures and overall capacities deployed to initiate the offering.

This Frost & Sullivan research studies the Latin American markets for VPN services. It provides valuable analysis of market drivers and restraints, along with forecasts identifying the areas of growth. The study covers network and edge-based IP VPNs as well as legacy VPNs (supported by frame relay/ATM platforms to configure Intranet/Extranet and remote access).

Edge-based IP Sec Solutions Expand the Target for IP VPNs down to Medium-Sized Enterprises

"IP edge-based solutions typically aim to provide extra value to IP VPN solutions by connecting remote corporate sites whose applications are neither too critical nor require high QoS," says the author of this study. "The 'transport cloud' is the Internet instead of the service provider's network and privacy is ensured though the introduction of IP Sec and a router to tunnel information."

For top regional players this is nothing but a complement to the network-based elements. However, with its low cost and high suitability, this service can be offered as a pure solution to lower-end companies once the top corporate segment gets saturated.

Legacy VPNs (ATM/Frame Relay based) Expected to have Demand Till Final Migration Takes Place

Given the vast frame relay layout deployed in Latin America, most networks have been built utilizing the existing legacy platforms to configure point-to-point/multipoint connections that link corporate sites and integrate different network applications. This allows the majority of companies that began developing their corporate networks prior to the emergence of IP MPLS to leverage the existing infrastructure and avoid higher upfront investments. Thus, legacy VPNs are expected to remain as the preferred choice for companies, which either lack the funds or are still reluctant to migrate from their platform, at least in the short and medium run.