Virtual Private Network finally set to take off in India, predicts IDC

The economic slowdown has had a deep impact on the IT as well as

general spending of the corporates. Thus the need has arisen for IT solution that can

reduce internal as well as external communication costs of the corporates. Virtual Private

Networks (VPN) thus emerge as a solution that helps the corporates to reduce costs as it

moves them away from expensive leased line. It also helps in providing corporates with

scalability and ease of manageability that other communication solutions lack.

In the light of the present and future scenario IDC in its report

titled ‘ VPN Services and Equipment: Market

Forecast and Analysis 2001 – 05 ‘expects

the Indian VPN services and equipment market to grow to Rs. 12.76 billions in 2005 from

Rs. 1.68 billions in 2001.

IDC believes that the major segments that would lead in terms of

adopting VPN in India are: -

• Finance and Banking for countrywide
  
  branch connectivity

• Manufacturing and Distribution industry
  
  for connecting various regional offices and online logistics

• Government institutions such as Income
  
  Tax Department and police Force

Apart from above travel and tourism is also an important target segment

because of its wide geographical spread and need for online logistics.

Drivers of VPN market in India FACE="Arial" SIZE="3">

• Cost effectiveness

           Compared to traditional

methods of providing site to site connectivity with equivalent levels of service

             management,

security, bandwidth and quality of service IP based service potentially provide

significant             cost

savings.

• eBusiness activities

            The prime driver in the

Indian context for the VPNs will be the eBusiness activities. With the advent of the

              concept of

SCM and CRM the basic need to get connected with the suppliers and the customers has

              fueled the

demand of VPNs especially in the distribution and logistics companies.

• Workforce mobility and virtual organization

            Many companies in all

sectors are moving away from centralized hierarchical structures to flatter

               decentralized

and distributed structure, and more use is being made of external resources:

• Home Workers
• Mobile Workers
• Contractors
• Virtual Team within organisation
• Virtual Team across organisations

            Therefore structural

changes within users organization creates considerable demand for private

                networking

services based on IP and it forms one of the most significant drivers for IP VPN services.

vamawate@idcindia.com

FACE="Arial" SIZE="3" COLOR="#000000">

Vibhas Amawate

Asst. Manager,

          Internet,

Convergence and Communication