In-Stat/MDR Finds Network-Based IP VPN Equipment Helping Service Providers Grow at Reduced Cost.

SCOTTSDALE, Ariz. -- Network-based IP (Virtual Private Network) VPN services (MPLS IP VPN, Virtual Router and Network-Based IPSec services) are one of the important growth areas in business networking services, according to In-Stat/MDR (http://www.instat.com). There are various types of equipment that enable service providers to offer these services. The high-tech market research firm estimates total worldwide sales revenues for network-based IP VPN equipment in 2003 to be $267 million. Edge routers accounted for 51% of total sales of network-based IP VPN equipment in 2003, and multiservice switches and IP services switches had quite similar market shares.

Network-based IP VPN services move VPN intelligence to the edge of the network, as opposed to initiating tunneling at the CPE, as with CPE-based VPN services. Most leading service providers offer at least one network-based IP VPN service for their business customers. According to Henry Goldberg, a senior analyst with In-Stat/MDR, "Network-based IP VPN services enable service providers to achieve economies of scale by serving multiple customers from equipment at an edge POP, and to substantially reduce operational costs of provisioning, management and maintenance. MPLS IP VPN and Virtual Routing over ATM services also allow service providers to earn incremental revenues by offering classes of service for different priority applications, and enable end users to reduce costs by converging all of their voice/data/video traffic onto a single service."

In-Stat/MDR finds some key new trends that are appearing in the way this equipment is being used to offer network-based VPN services:

--Service providers are selling DSL access lines to small/mid-sized businesses and branch offices as a lower-cost alternative to traditional leased lines.

--End users that are using DSL access lines to connect to network-based IP VPN services require broadband subscriber management services, and a number of vendors offer such services on the same platform as their VPN services.

--To meet the growing demand from businesses to outsource security, edge router, IP services switch and other vendors are layering on more security services into their products, in addition to supporting IP VPN services. Some equipment vendors are also offering gateway services to connect remote users with IPSec and SSL clients to corporate sites on layer 3 or layer 2 VPN services.

The report, "Network-Based IP VPN Equipment: What Service Providers Want" (#IN0401355WN), provides a unique examination and analysis of the four categories of equipment that enable service providers to offer network-based IP VPN services. These four categories are: edge routers, multiservice switches, IP services switches and other equipment.

The key new trends shaping this market are identified. Detailed profiles are given of leading vendors from each equipment category, describing their product offerings, IP VPN services enabled, other value-added services offered, product capacities, customers and competitive strengths. Market shares for each category of network-based IP VPN equipment sales revenues in 2003 are estimated. A five-year forecast of network-based VPN equipment sales revenues is also provided. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/bcatalogue.asp?id=4 or contact Erin McKeighan; emckeighan@reedbusiness.com or 480-609-4551. The report price is $2,995.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With more than 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.