SMEs hold the purse strings for IP VPN success

The IP VPN market is already worth around €1.74bn and looks set to enjoy healthy growth in the future if more and more SMEs adopt the secure tunneling technology, according to research from consultants Frost & Sullivan.

While the business big boys have been slow to take up the service due to their longer decision-making process, their small and medium-sized cousins are proving more reactive to the latest technology - especially when they get a sniff of the cost-savings IP VPNs can bring.

SMEs' fondness for IP VPN is also a result of a good match between the networks' strengths and the businesses' needs, according to Niamh Spillane, analyst at Frost and Sullivan.

"SMEs often look for cost-effective networks running over the internet and are generally not overly concerned with quality of service... SMEs do not want purely fast data networks, they are seeking flexibility and aspire to equip their workforce with the ability to access the corporate network from any location," she said in a statement.

But IP VPN providers won't be cracking open the champagne just yet. Frost & Sullivan has found that most SMEs are currently using some WAN technology but because they're locked into long contracts with providers they will only be free to make the switch to IP VPN when the deals expire – a lead time of several years.

Economic factors, no properly defined market for IP VPN and the rate of development and improvement for older, competing networking technologies are also thought to be holding back take-up.