Results of a survey released Thursday indicate that businesses in the U.K. and The Netherlands are embracing IP-based Virtual Private Networks and turning away from Wide Area Networks.

by John Lewell of uk.internet.com [March 1, 2001]

400 UK and Dutch businesses were quizzed in a survey conducted by analyst firm IDC on behalf of managed IP services provider ipulsys, a company owned by venture capitalist Warburg Pincus.

Currently, 60 percent of U.K. companies use WANs, but there is a growing interest in implementing higher bandwidth IP VPNs. In The Netherlands, over 50 percent of interviewees said IP VPNs were the way forward for their corporate communications.

"It appears that WANs are definitely on the wane," said Peter Glasbeek, chief executive, ipulsys.

"Our survey revealed that more than half of businesses are not willing to settle for the insecurities and low bandwidth of the public internet. Nor are they willing to pay premium prices for dedicated links that force them to pay by pipe size rather than bandwidth usage," he observed.

Glasbeek said businesses are clearly in favor of Web-enabled global communications and are becoming aware that IP VPNs add real value.

IDC Research Director Eric Owen believes the future is rosy for IP VPNs. Transition to the IP VPN era should be relatively easy, he said, given the abundance of IP already in the enterprise.

"WAN managers who move away from traditional WAN services, based on private networks or on transport layer services, such as frame relay, towards IP-based services are offered considerably more flexibility from both a cost and capacity perspective," said Owen.

During 2000, IDC published figures that indicated an acceleration in the IP VPN market, with revenues growing to US $2.9 billion by 2004 and the number of connections growing to over 3.6 million, 3 million of which are expected to be dial-up.

According to the recent survey, nearly one in four companies now sees advantages in outsourcing services, partly as a result of the pace of development and change. IDC and ipulsys believe this factor, too, will have a positive impact on IP VPN implementation.

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