North America Virtual Private Network (VPN) Market Share was over USD 25 billion in 2019 and is expected to register a lucrative growth between 2020 and 2026 at a CAGR of over 12%.
VPN Market, By VPN Type
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The North America VPN market growth is attributed to the increasing demand for secure connectivity and privacy in sensitive data transmission. The growing work-from-home trend in the region due to the COVID-19 outbreak is supporting the market growth. The region also witnessed an extensive number of cyberattacks and data breach incidents, which are other prominent factors enabling the enterprise-wide adoption of VPN solutions in the region.
The VPN software segment is anticipated to witness an exponential growth rate of over 13% from 2020 to 2026. The growth is attributed to the growing need for sophisticated platforms to provide access to enterprise resources over the client’s devices. The VPN software allows computers to exchange keys with a remote server through which all the data is encrypted and kept secure from unauthorized access. This provides enhanced privacy to enterprise resources and processes.
The MPLS-based VPN segment held over 35% share in the North America VPN market in 2019 and is expected to maintain its dominance by 2026. The demand for MPLS-based VPN has increased due to the need to connect data storage facilities with corporate sites. MPLS VPN is primarily used to enable priority-based data transmission over multiple locations. As per business requirements, companies can effectively utilize the latency and resources.
The extranet connectivity segment is expected to witness a steady momentum from 2020 to 2026. The enterprise demand for flexible access to enterprise resources dispersed across private infrastructure is addressed through extranet connectivity. In extranet connectivity, a single server connection is leveraged to transmit multiple sensitive information. It also eliminates the need for additional network infrastructure and assists an enterprise in the utilization of existing networking resources.
The use of VPN solutions and services for commercial applications is expected to witness a steady market growth. Companies operating in the BFSI sector are leveraging VPN solutions & services to ensure optimum security throughout a financial transaction. In addition, the growing demand to protect customers’ sensitive information is enabling financial institutions to deploy VPN solutions. Similarly, VPN deployment is helping enterprises to reduce capital expenditure on security infrastructures.
In the U.S., the extensive penetration of mobile devices and adoption of work from home & BYOD policies are contributing to the VPN market growth. For instance, in 2018, nearly 78% of enterprises in the U.S. reported the use of BYOD activities. Similarly, according to the GSMA Intelligence’s Mobile economy 2019 report, in 2018, the smartphone adoption rate in the U.S. was 83%. Furthermore, amid the COVID-19 pandemic, increasing cyberattacks and data breach incidents in the country will support the adoption of VPN solutions.
Companies operating in the region are focusing on new product development and product innovations. For instance, in July 2019, Array Networks, Inc. upgraded SSL VPN with enhanced features for larger enterprises. The company expanded its solution support to windows server 2016 and 2019 for remote desktop processes. It also provides email-based hardware ID self-registration. Some of the leading companies operating in the North America market include Cisco Systems, Inc., Citrix Systems, Inc., Google LLC, IBM Corporation, and Microsoft Corporation.