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U.S. MPLS/IP VPN Services Market

  • Publication Date:March 2009
  • Publisher:Frost & Sullivan
  • Product Type: Report
  • Pages:30

U.S. MPLS/IP VPN Services Market

Converged Voice, Data, and Video Applications Spearhead Growth in the U.S. MPLS/IP VPN Services Market

Converged services (voice +data + Internet) are gaining traction in the MPLS VPN space with customers increasingly asking for access to Internet and VoIP to be bundled with data networks on their VPNs. Specifically, VoIP is acting as a key driver for migration from other services to VPN services. Maintaining appropriate quality of service for multiple steams of application traffic while optimizing bandwidth consumption requires class of service (CoS) packet-tagging and traffic prioritization; two service attributes of a MPLS VPN. Essentially, CoS allows enterprises to meld different types of application traffic (voice, video, real-time data, non real-time data) onto a single network infrastructure without jeopardizing quality of service for performance-sensitive applications. For some enterprises, however, managing application performance in a converged network environment may entail skill and availability requirements that exceed those of in-house IT resources. For this reason, managed network services are growing in popularity.

The U.S. MPLS VPN services market has entered the growth stage of the product lifecycle and demand for this service has been growing across verticals. Revenues for the U.S. MPLS/IP services market totaled $4.8 billion in the year 2008 and are expected to reach $9.3 billion in 2013. "Traditional layer 2 VPN services such as ATM and Frame Relay are in the decline stage of product lifecycle, giving layer 3 MPLS VPN services a boost," notes the analyst of this research service. "Layer 3 VPN enables customers to build a fully meshed network supported by strong SLAs and CoS to handle convergence of voice, data, and video applications, thus driving market migration to lP-based networks."

Traditional TDM Port Speeds Continue to Dominate the MPLS VPN Space

"Traditional time division multiplexing (TDM) services still rule the access space in the US, thus creating a bottleneck for customers to migrate to higher bandwidth ports," says the analyst. "The ubiquitous availability of T1/T3 links in the US has led to the domination of TDM services in the MPLS VPN space." However, alternative access technologies are steadily gaining traction. Market trends indicate that T1 and Fractional T3 speeds are the most widely used services to connect to MPLS network. That said, as the bandwidth needs of customers expand, they are increasingly evaluating Ethernet options. Service providers are integrating managed security services and MPLS VPNs in their hosted and Cloud Computing offers.

Considered in the light of the MPLS network assets owned by service providers, the U.S. market is mature. Most domestic carriers have their own expansive footprint and do not resort to buying and selling of VPNs from other carriers. End-to-end MPLS VPN services are sold among carriers to augment the service as a backup option. The wholesale segment is experiencing robust growth due to high demand from content providers and system integrators in the U.S. market. These end-user segments are fuelling the demand for high bandwidth ports. The wholesale MPLS offering is usually targeted at international carriers aiming to secure their footprint in the U.S. market.


The following technologies are covered in this research:

  • Layer 2 VPN
  • Layer 3 VPN
    • Executive Summary
      • 1. Introduction
      • 2. Market Spending Overview
    • Research Scope and Definitions
      • 1. Research Scope
      • 2. Definitions
    • Market Overview and Trend Analysis
      • 1. Measurements
      • 2. Market Drivers
      • 3. Market Restraints
      • 4. Trend Analysis
    • Market Revenue Forecasts and Pricing Analysis
      • 1. Market Revenue Forecasts
      • 2. Pricing Analysis
    • Competitive Landscape and Market Share Analysis
      • 1. Competitive Landscape
      • 2. Market Share Analysis
  • List of Figures
  • Chapter 1
    • MPLS/IP VPN Services Market: Snapshot of Market Revenues (U.S.), 2008
    • MPLS/IP VPN Services Market: Market Drivers Ranked in Order of Impact (U.S.), 2009-2013
    • MPLS/IP VPN Services Market: Market Restraints Ranked in Order of Impact (U.S.), 2009-2013
    • MPLS/IP VPN Services Market: Revenue Forecasts (U.S.), 2008-2013
    • MPLS/IP VPN Services Market: Percentage Split in Revenues by Wholesale vs. Retail (U.S.), 2008-2013
    • Wholesale MPLS/IP VPN Services Market: Revenue Forecasts (U.S.), 2008-2013
    • Retail MPLS/IP VPN Services Market: Revenue Forecasts (U.S.), 2008-2013
    • MPLS/IP VPN Services Market: Pricing Trends by Port Speed (U.S.), 2008
    • MPLS/IP VPN Services Market: Market Share Analysis (U.S.), 2008
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