Virtual Network Services To Grow

Revenue from virtual private network services in the country is estimated to increase from Rs 98.05 crore in 2001 to Rs 858.6 crore in 2006, according to IDC.

In the face of improving technology, revenue compression and cost consciousness amid weak economic conditions, several network managers in the Asia-Pacific are planning to use Internet protocol virtual private networks to enhance, or even replace, their conventional frame-relay or wide area network services of automated teller machines (ATMs), an IDC release said.

"The idea that public networks such as integrated services digital network (ISDN), frame-relay or ATM could be increasingly used to carry mixed data (voice and video), led to the concept of using a virtual private network. It makes a public network cost effective and provides security to a private network," V Shekhar Avasthy, head of Internet, communications and convergence research at IDC India, said.

IDC also said the uptake of Internet protocol virtual private networks was hampering the growth of traditional services. Companies are deploying Internet protocol virtual private networks as a back-up or to connect non-mission critical networks, instead of replacing their existing managed data networks. Although most firms are deploying the virtual private networks on an incremental basis, their use will increase with time.

However, the virtual private network services have been hit by the global economic slowdown. Some companies, especially communication carriers hit by the slump in the technology sector, have deferred decisions on communication solutions.

According to IDC, the advantages of Internet protocol virtual private networks include cost-effectiveness, rising demand for local connectivity and increase in outsourcing.

The disadvantages include concerns about security and reliability, popularity of frame- or ATM-based virtual private networks, and lack of necessary infrastructure. "However, with newer technologies like MPLS gaining prominence, the future of such services in India looks bright," added Avasthy.