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| Although the IP VPN market is showing signs of maturing in established regional markets such as Western Europe and North America, as well as in individual countries, international growth has been driven by unexpectedly robust growth from emerging markets (Asia Pacific and Latin America), despite the impact of the global recession. These economies have both driven demand for international connectivity and for in-country services, which is also reflected in the expanding number of IP VPN service providers based in these countries looking also to expand their global presence. Further growth has also been delivered by the continued penetration of IP VPN services into the SME (Small and Medium-sized Enterprise) segment, with a 'sweet spot' emerging of globalising mid-market customers which have tended to cope with the prevailing economic environment better than other business segments. With IP VPN services established as the lifeblood of corporate businesses, the growing ubiquity of broadband has helped in delivering both greater reach and in enabling additional applications like voice and conferencing to be delivered to small offices and home workers. At the other extreme, a growing range of metropolitan, national and international Ethernet services has complemented IP VPN services by adding high-speed connectivity between key sites such as headquarters, regional hubs and data centres. In addition, with businesses looking to deliver greater productivity and flexibility, the ability of IP VPNs securely to make corporate data and applicatuons available to end users that are on the move, and to business partners or customers, continues to expand with demand. A consequence of the maturing market and the fact that most service providers use the same equipment supplier(s) for their products is that establishing clear differentiation becomes more of a challenge, with most players able to offer attributes like secure Internet access, remote access and robust SLAs covering everything from delivery to on-going network performance and service restoration guarantees. Given this challenge, service providers have tended to focus their attention on individual aspects of their service (e.g. global reach, integration with other services, aggressive pricing) for differentiation. However, with customers of all sizes and across most geographies able to choose from a good selection of service providers, many decisions are likely to hinge on 'softer' aspects of the relationship between customer and service provider, such as account management and customer service. What is clear is that IP VPNs continue to dominate the core of most multi-site customer networks and that they continue to facilitate the successful carrying out of business the world over. |
