The global virtual private network (VPN) market is anticipated to register considerable gains through 2032, primarily driven by the widespread adoption of internet services for business connectivity across the globe.
Rising level of connectivity and internet penetration is making consumer data more vulnerable to malicious access and has led to an increase in the instances of cyberattack. Subsequently, several global organizations, on their digital migration journey, are adopting cybersecurity measures to ensure the safety of their data and business assets.
In this regard, encrypted connectivity has become the leading tool enterprises use to ensure information security, which is shaping the VPN market outlook.
The overall virtual private network market landscape is bifurcated into different segments such as component, type, connectivity, application, and regional outlook.
Based on component, the market is segmented into hardware, services, and software. Amongst them, the services segment is slated to experience strong growth driven by the remote working trend. Despite COVID-19 approaching its end through successful vaccination drives, many organizations have opted to work on a completely remote or hybrid working model. This has created a need for them to provide remote connectivity to employees and manage enterprise network infrastructure through VPN services.
Based on type, the industry is segmented into IP VPN, cloud VPN, MPLS VPN, and mobile VPN. The MPLS segment held an industry share of over 40% in 2022, owing to the dwindling growth of frame relay market. Organizations increasingly prefer multiprotocol label switching VPN (MPLS-VPN) services as they help them prioritize real-time apps such as Voice over Internet Protocol (VoIP), and video conferencing, among others, with a better quality of service (QoS).
Based on connectivity, the industry is segmented into site-to-site, remote access, and extranet. The remote access VPN segment is slated to register strong gains driven by its wide-scale adoption across global enterprises. The remote working trend has created an acute need among organizations to extend their corporate network, which is further propagating segment expansion.
Based on application, the market is categorized into commercial, consumer, and service providers. The commercial segment is further bifurcated into BFSI, healthcare, IT, manufacturing, and government. Among these, the manufacturing segment is poised to grow at 20% CAGR by 2032, driven by the rising demand for machine-to-machine communication in a growingly automated factory setting. VPN solutions ensure smooth and secure communication between multiple IP-enabled devices remotely over the internet as if the devices are connected to one network.
Regionally, the market is segmented into North America, the Middle East and Africa, Latin America, Europe, and Asia Pacific. The North America virtual private network market registered over USD 14 million in 2022, fueled by increasing cybercrime across numerous industry verticals. As per the 2021 Annual Data Breach Report by Identity Theft Resource Center? (ITRC), in 2021, data breaches increased more than 68% compared to the year prior.