With IP (Internet Protocol) moving to the heart of all communications as a universally

accepted standard, service providers are battling to position themselves as leading IP

companies – not just in technology terms, but also in marketing terms.

IP is increasingly being used to carry all forms of communications – from voice to

data to video – and IP VPNs remain the focus of this transformation for business

customers of all sizes. With IP VPN services providing the lifeblood of corporate

existence, service providers have been working to make their IP VPN and associated

services as universally available as possible – as is evidenced by the growing range of

‘mobility’ access solutions available – from dial-up to mobile to Wi-Fi. This is being

complemented by a parallel investment, both organic and inorganic, by service

providers in expanding the reach and depth of their networks, with literally hundreds

of millions of dollars being invested by individual companies.

Alongside the drive to make IP VPN services universally available to all customers’

end users is the drive also to hand over increasing levels of visibility and control over

services and the applications that run over them to network managers. Ever greater

functionality is being offered at close to real time over secure Web portals. At the

same time, customers are showing a growing willingness to hand over management of

non-mission-critical day-to-day activities, such as router management, to service

providers in the form of managed services.

With the migration of multiple legacy communications platforms towards converged

IP-based networks, customers are also showing a willingness for, and service

providers a desire to provide, a growing range of professional services – helping

customers with the planning, implementation and on-going management of their

networks and services. This has the benefit for customers of enabling a smoother

transition and, for service providers, of cementing longer-term relationships with

customers – this is important in a market where the basic functionality of IP VPNs is

rapidly commoditising.

As the market matures at the top end, amongst government customers, multi-national

corporations (MNCs) and large national corporate businesses, growth opportunities

are being presented more by medium-sized and smaller businesses. Many service

providers have opted, as with legacy products, to try to exploit third-party channels to

market to maximise their addressable market for minimum investment.

A natural stage of any maturing market is that of consolidation and there has been

evidence of this taking place amongst IP VPN service providers. Although drivers for

such activities are broader than the IP VPN product set, the move towards converged

networks helps to make combining companies easier. In this way, IP VPNs are

helping to drive the business telecoms sector from both the demand and supply sides.