Virtual Private Network market to reach US$77.1 bn by 2026

Amid the COVID-19 crisis, the global market for Virtual Private Network (VPN) estimated at US$44.6 Billion in the year 2022, is projected to reach a revised size of US$77.1 Billion by 2026, growing at a CAGR of 15.3% over the analysis period, according to Research and Markets.

The need to safeguard business data and transactions is thus driving enterprises towards highly secure technologies, thus presenting significant growth opportunities for the VPN market. Increasing incidences of data theft, both financial and personal information, coupled with compromised web security are propelling the need for VPN to enable a safe, encrypted connection.

The growing number of cases of cyberattacks is another major factor that urges many enterprises to move to VPN technology. In today`s unsafe cyber environment, more and more industry verticals are adopting VPN services to ensure complete protection of their data while in transmission. With the ongoing COVID-19 pandemic impacting business operations, enterprises are increasingly turning towards Internet-based services for business continuity purposes.

This is consequently driving adoption and expansion of VPNs. The enterprise mobility trend and the need for providing ubiquitous access to company networks especially for remote workforce is also enhancing adoption of VPNs. With about 45% of users using their mobile devices for personal as well as professional purposes, the adoption of VPN has gained prominence among enterprises looking to ensure safe and secure access to their employees.

Multiprotocol Label Switching, one of the segments analyzed in the report, is projected to grow at a 15.4% CAGR to reach US$42.7 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Cloud segment is readjusted to a revised 17.3% CAGR for the next 7-year period.

This segment currently accounts for a 18.2% share of the global Virtual Private Network (VPN) market. The growing need for secure and multi-site connectivity and increasing cloud migration creates steady demand for Multiprotocol Label Switching (MPLS) VPN solutions.

Real-time applications such as voice over IP (VoIP), video conferencing and business-critical bank apps receive special support from MPLS VPN solutions. A cloud-based VPN provides access to global VPN to users, including third-party users and subscribers, over the public network. The increasing adoption of virtual technologies and devices in application delivery, networking and security products and services is fueling growth in the cloud VPN market.

The U.S. Market is Estimated at $16.5 Billion in 2022, While China is Forecast to Reach $11.2 Billion by 2026
The Virtual Private Network (VPN) market in the U.S. is estimated at US$16.5 Billion in the year 2022. The country currently accounts for a 34.83% share in the global market. China, the world’s second largest economy, is forecast to reach an estimated market size of US$11.2 Billion in the year 2026 trailing a CAGR of 17.4% through the analysis period.

Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 12% and 12.8% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 12.1% CAGR while Rest of European market (as defined in the study) will reach US$12.9 Billion by the end of the analysis period.

Developed economies are the leading regional markets for VPN worldwide. In North America, the VPN market continues to grow due to the increased risk of cybercrime and the subsequent need to protect enterprise data. The widespread adoption of digital technologies and growing incidents of cyberattacks are fueling demand for VPN services.

Europe is another major regional market for VPN, with the widespread adoption of advanced digital technologies in the region spurring market growth. The large number of enterprises and growth in the Internet users base, especially amidst the ongoing COVID-19 pandemic, is stimulating the VPN market in Europe. The increasing use of Internet for personal and business purposes, economic growth and industrialization are contributing to the growing adoption of VPNs in the Asia-Pacific region.

IP Segment to Reach $17.4 Billion by 2026

The IP VPN market is experiencing high growth, driven mainly by the significant cost benefits offered by the technology. IP services also help in simplifying the overall design of private networks and ensures high quality of service for mission critical operations. It is due to this reason that IP VPN is emerging as a lucrative option for enterprises looking to cut down expenditure on networking.

In the global IP segment, USA, Canada, Japan, China and Europe will drive the 13.8% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$6.6 Billion will reach a projected size of US$16.3 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets.

Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$1.9 Billion by the year 2026, while Latin America will expand at a 12.1% CAGR through the analysis period.

CT Bureau