The Global Cloud Virtual Private Network (VPN) Market Size, Share, Trends, Product Type (Services and Software), Connectivity Type (Site-To-Site and Remote Access), Company Size, End-user, and Region – Forecast to 2030 report has been published by ResearchAndMarkets.com.
The global cloud Virtual Private Network (VPN) market is expected to experience rapid growth in the coming years, with an estimated market size of USD 40.78 Billion by 2030 and a projected revenue compound annual growth rate (CAGR) of 21.6%.
This growth can be attributed to various factors, including the increased demand for cloud VPN technologies in security products and services, the rising adoption of secure remote access, and the growing acceptance of private clouds.
Cloud VPNs are becoming increasingly popular among businesses due to their ability to provide high security without sacrificing usability. They are cost-effective and easy to set up, and provide secure, encrypted web browsing capabilities. Compared to traditional VPNs, the new generation of cloud-based VPNs offers more flexibility, cost efficiency, and security features. This makes them ideal for businesses that regularly share sensitive or confidential information over private networks.
Cloud VPNs protect against both internal and external threats, and offer faster access to applications, ensuring smooth business operations. Major tech companies are investing in cloud VPN-based services, which is contributing significantly to market revenue growth. For example, GoodAccess recently secured a $1 million seed funding round to expand its cloud-based VPN services. Similarly, HMD Global, the manufacturer of Nokia smartphones, has partnered with ExpressVPN to offer secure digital connections on mobile devices using 3G, 4G, and 5G networks.
The market for cloud VPN services is expected to grow due to the increased adoption of secure remote access and the widespread acceptance of private clouds. Leading cloud VPN service providers are focusing on replacing traditional VPNs with cloud VPNs to meet the growing demand for more secure and sophisticated technologies that support privacy protection in a reliable and streamlined manner. Businesses that have already adopted cloud services have seen significant improvements in process efficiency, time to market, and IT spending reduction.
Cloud computing investment is expected to reach $160 billion worldwide by 2020, nearly twice what it was in 2017, and cloud solutions are expected to account for 80% of all IT investments by 2019. Cloud VPNs enable secure connections between offices located anywhere in the world over an open network and can connect any number of branch offices with the main office, supply chain, and partners. The VPN technology also enables user-to-office connections, making remote working simple.
The revenue growth in this industry is driven by an increase in product launches by leading tech companies that target secure remote access and widespread acceptance of cloud computing. For instance, Google has released BeyondCorp Remote Access, a zero-trust remote-access service that allows remote teams to access their companies’ internal web-based services without the use of a VPN.
The use of VPNs is restrained by stringent government regulations, which limit the growth potential of the market. Governments worldwide have implemented severe restrictions and regulations against using VPNs to prevent criminal use and increase the visibility of online activity. Cybercriminals can use VPNs to conceal their illegal activity and maintain their anonymity. New regulations mandate that all VPN service providers keep customer data for at least five years.
For example, India has approved a law requiring all VPN service providers to retain user data, including names, email addresses, phone numbers, and IP addresses, for at least five years. These regulations are focused on strict VPN regulations, and the national order mandates the collection of specific, substantial customer data even after users delete their accounts or cancel their subscriptions. These regulations apply not only to VPN providers but also to cloud service providers, data centers, and cryptocurrency exchanges.
Product Type Insights
The global Cloud Virtual Private Network (VPN) market is divided into two product types: software and services. In 2021, services dominated the market, with Managed Security Service Providers (MSSPs), Virtual Private Network as a Service (VPNaaS), and cloud-based remote access being some of the frequently used services. The need for managed cloud VPN-as-a-service solutions has risen as businesses require secure and remote connections to their corporate network through the Internet.
Additionally, cloud-based services have gained popularity among businesses as they offer cost-effectiveness. On the other hand, the software segment is predicted to experience rapid growth during the forecast period. Many businesses have realized that using a VPN provides an extra layer of protection and privacy for their remote workers. Cloud-based VPN software allows users to access systems through an internet-based software deployment approach. This eliminates the need for businesses to maintain physical servers or infrastructure.
Connectivity Type Insights
The global Cloud Virtual Private Network (VPN) market is also segmented based on connectivity type: site-to-site and remote access. Site-to-site VPNs held the largest revenue share in 2021 due to their secure IPsec protocols that encrypt communication transmitted through the VPN tunnel. They are used to establish encrypted links between VPN gateways located at different geographical sites, which require secure inter-site communication.
The site-to-site VPN tunnel also prevents any attempts to intercept traffic from the outside. Recent innovations in site-to-site VPN services, such as IPSec VPN connections through Direct Connect, are driving revenue growth of this segment. On the other hand, remote access VPNs are predicted to grow at a steady rate during the forecast period. The coronavirus pandemic has led to the increased popularity of remote access VPNs, allowing remote employees to connect safely to company networks. Cloud-based solutions are preferred to control costs, and major tech companies are launching innovative remote VPN solutions to drive revenue growth of this segment.
Based on end-users, the telecom and IT sector held the largest revenue share in 2021. New demands for fast and secure VPN networks by the telecom industry have led to the growth of cloud VPNs. Operators and vendors in the telecom industry are adopting cloud-native technologies, while public cloud and IT companies have been using them for some time. Cloud-based VPNs have experienced tremendous growth over the past five years, leading to a rise in global spending on cloud computing. Cloud VPNs offer virtual private branch exchange capabilities, improving employee accessibility while maintaining cost management.
In terms of regional analysis, the Cloud Virtual Private Network (VPN) market in North America has dominated the global market in 2021 with the highest revenue share. This can be attributed to the increasing partnerships between major companies and government agencies to address data protection and privacy issues. Furthermore, the presence of leading market players in the region has been a driving factor for market growth. For example, Google, a subsidiary of Alphabet Inc., has announced its plans to launch a VPN service for its users that will be bundled with certain Google One subscription levels. The VPN service has been introduced in the United States in 2020 for Android users through the Google One app, with plans to expand to other nations and operating systems such as iOS, Windows, and Mac.
Europe is anticipated to experience steady revenue growth during the forecast period. According to NordLayer’s Global Remote Work Index, Germany is the top country for remote work followed by Denmark, the USA, Spain, Lithuania, the Netherlands, Sweden, Estonia, Singapore, and France. Consequently, there has been a rising demand for privacy protection, and businesses are choosing cloud-based solutions to provide their remote access to Virtual Private Networks to efficiently manage costs. Major IT companies are releasing their own advanced remote VPN solutions, which is driving revenue growth in the region. For instance, Deutsche Telekom has launched a cloud VPN service for small and medium-sized organizations in Croatia, Hungary, and Slovakia, providing easy access to highly secure and scalable internet services. The cloud VPN option includes cloud-managed IT solutions, firewalls, online protection, and remote access through encrypted VPNs. Additionally, Cisco and Deutsche Telekom are collaborating on this project.
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Samsung Electronics and KDDI announced the successful demonstration of Service Level Agreements (SLA) assurance network slicing in a field trial conducted in Tokyo, Japan. For the first time in the industry, the companies proved their capabilities to generate multiple network slices using a RAN Intelligent Controller (RIC) on a live commercial 5G Standalone (SA) network. The RIC, provided by Samsung in this field trial, is a software-based component of the Open RAN architecture that optimizes the radio resources of the RAN to improve the overall network quality.
Network slicing (which requires a 5G SA core network) enables multiple virtual networks to be created within a single physical network infrastructure, where each slice is dedicated for a specific application or service — serving different purposes. For instance, 5G SA network operators can create a low latency slice for automated vehicles, an IoT slice for smart factories and a high bandwidth slice for live video streaming — all within the same network. This means that a single 5G SA network can support a broad mix of use cases simultaneously, accelerating the delivery of new services and meeting the tailored demands of various enterprises and consumers.
“Network slicing will help us activate a wide range of services that require high performance and low latency, benefitting both consumers and businesses,” said Toshikazu Yokai, Managing Executive Officer, General Manager of Mobile Network Technical Development Division at KDDI. “Working with Samsung, we continue to deliver the most innovative technologies to enhance customer experiences.”
Through this field trial conducted in Q4 of 2022, KDDI and Samsung proved their capabilities of SLA assurance to generate multiple network slices that meet SLA requirements, guaranteeing specific performance parameters — such as low latency and high throughput — for each application. Samsung also proved the technical feasibility of multiple user equipment (UE)-based network slices with quality assurance using the RIC, which performs advanced control of RAN as defined by the O-RAN Alliance.
“Network slicing will open up countless opportunities, by allowing KDDI to offer tailor-made, high-performance connectivity, along with new capabilities and services, to its customers,” Junehee Lee, Executive Vice President, Head of Global Sales & Marketing, Networks Business at Samsung Electronics. “This demonstration is another meaningful step forward in our efforts to advance technological innovation and enrich network services. We’re excited to have accomplished this together with KDDI and look forward to continued collaboration.”
For more than a decade, the two companies have been working together, hitting major 5G networks milestones that include: KDDI’s selection of Samsung as a 5G network solutions provider, end-to-end 5G network slicing demonstration in the lab, 5G network rollout on 700MHz and the deployment of 5G vRAN on KDDI’s commercial network.
Samsung has pioneered the successful delivery of 5G end-to-end solutions including chipsets, radios and core. Through ongoing research and development, Samsung drives the industry to advance 5G networks with its market-leading product portfolio from virtualized RAN and Core to private network solutions and AI-powered automation tools. The company is currently providing network solutions to mobile operators that deliver connectivity to hundreds of millions of users around the world.