Multi-protocol Labelled Switching, Internet Protocol, Virtual Private Network Services Market Size, Share & Trends Analysis Report By Service, By Application, By Deployment Model, By Industry, By Region, And Segment Forecasts, 2024 - 2030

Market Size & Trends

The global multi-protocol labelled switching, internet protocol, virtual private network services market size was estimated at USD 64.12 billion in 2023 and is expected to grow at a CAGR of 6.6% from 2024 to 2030.The multi-protocol labelled switching, internet protocol, virtual private network (MPLS IP VPN) services market is set for significant growth as numerous enterprises intend to integrate these networks to leverage the various benefits they offer, such as optimizing performance and reducing costs. MPLS IP VPN services offer a substantial upgrade over legacy systems by providing enhanced reliability, security, and scalability. MPLS networks, for instance, ensure high performance and low latency, which are critical for applications that require real-time data transmission, such as Voice over Internet Protocol (VoIP) and video conferencing. Additionally, MPLS can prioritize traffic based on the type of service, ensuring that mission-critical applications receive the necessary bandwidth and performance. This level of service quality needs to be more attainable with outdated legacy systems, prompting organizations to transition to MPLS networks to meet their operational needs effectively.

As cyber threats become increasingly sophisticated and prevalent, organizations are prioritizing the security of their data and network infrastructure. Modern cybersecurity technologies integrated into MPLS IP VPN services offer robust protection against a wide range of threats, including data breaches, malware, and ransomware attacks. These advancements ensure that sensitive information is encrypted and secure, providing peace of mind for businesses that rely on remote access and data transmission over public networks.

One significant cybersecurity advancement driving the market is the implementation of advanced encryption protocols and secure tunneling methods in VPN services. These features protect data in transit from interception and tampering, which is especially critical for remote workers and businesses with geographically dispersed operations. Additionally, MPLS networks enhance security by using dedicated, private pathways for data transmission, reducing the risk of unauthorized access and cyber-attacks. This high level of security is essential for industries such as finance, healthcare, and government, where data integrity and confidentiality are paramount.

Service Insights

The layer 3 segment led the market in 2023, accounting for over 60.0% share of the global revenue, owing to its advanced routing capabilities and superior network performance. Layer 3 services, which operate at the network layer of the Open Systems Intercommunication (OSI) model, provide enhanced traffic management and routing efficiency, which is crucial for handling large volumes of data across diverse networks. These services enable the implementation of quality-of-service policies, ensuring that critical applications receive the necessary bandwidth and minimal latency. This capability is particularly important for enterprises that rely on real-time communication and data-intensive applications.

The layer 2 segment is predicted to foresee significant growth in the coming years, primarily due to its ability to provide seamless and efficient connectivity for a wide range of applications. Layer 2 VPNs operate at the data link layer of the OSI model, allowing them to extend a Local Area Network (LAN) across a Wide Area Network (WAN). This is crucial for enterprises operating across multiple locations that require a unified network connectivity, enabling them to share resources and applications. The simplicity and effectiveness of layer 2 VPNs in creating this virtual LAN connectivity have made them a preferred choice for many businesses, especially those with a need for straightforward, cost-effective network solutions.

Deployment Model Insights

The managed services segment accounted for the largest market revenue share in 2023due to its growing popularity among businesses seeking comprehensive and outsourced network management solutions. Managed Services Providers (MSPs) offer end-to-end management of MPLS IP VPN services, including design, implementation, monitoring, and maintenance. This approach allows enterprises to focus on their core business activities while relying on expert providers to ensure the security, reliability, and performance of their network infrastructure. expertise. MSPs offer proactive monitoring, rapid response to network issues, and continuous optimization of network performance, all of which contribute to enhanced operational efficiency and cost-effectiveness.

The self-services segment is anticipated to witness significant growth in the coming years. This growth can be attributed to the increasing demand for flexible, on-demand network solutions that empower businesses to manage and customize their network services independently. Self-service platforms allow enterprises to quickly provision, modify, and optimize their MPLS IP VPN services through intuitive interfaces and automation tools, reducing reliance on manual intervention and streamlining operations. Enterprises are increasingly drawn to self-service models for MPLS IP VPN services due to their ability to enhance agility and responsiveness. These platforms enable businesses to scale bandwidth, add new locations, and adjust network configurations in real time, aligning with changing business needs and market dynamics.

Industry Insights

The IT & telecom segment accounted for the largest market revenue share in 2023, owing to the increasing demand for robust and scalable network infrastructure to support the rapid expansion of digital services, cloud computing, and IoT deployments within the industry. MPLS IP VPN services offer reliable connectivity, efficient data transmission, and secure access to cloud resources, which are crucial for IT and telecommunication companies to deliver high-quality services to their customers. The industry actively invests in upgrading network infrastructure to enhance customer experience, optimize operational efficiency, and support emerging technologies such as 5G networks and edge computing. MPLS IP VPN services provide the necessary agility and flexibility to adapt to evolving technological requirements and customer demands.

The education segment is anticipated to exhibit the fastest CAGR over the forecast period. This growth is driven by the increasing integration of digital learning platforms, remote education solutions, and e-learning technologies across educational institutions globally. MPLS IP VPN services play a crucial role in enabling secure and reliable connectivity for distance learning initiatives, virtual classrooms, and administrative operations within educational organizations. Educational institutions are increasingly adopting MPLS IP VPN solutions to support the growing demand for online education in response to the COVID-19 pandemic that accelerated the shift toward remote learning.

Application Insights

The audio conferencing segment accounted for the largest market revenue share in 2023, driven by the increasing adoption of remote collaboration tools and unified communications solutions. MPLS IP VPN services play a crucial role in supporting audio conferencing by providing reliable features that ensure clear and uninterrupted voice communications. These services prioritize voice traffic, minimizing latency and jitters, which are essential for maintaining high-quality audio during conference calls. The shift toward hybrid work models and global teams has accelerated the demand for secure and efficient audio conferencing solutions. MPLS IP VPN services offer robust security measures, including encryption and secure tunnels, to protect sensitive communications and ensure compliance with data privacy regulations.

The video conferencing segment is predicted to foresee significant growth in the coming years.Video conferencing is poised to become a pivotal segment, primarily due to MPLS's capability to deliver high-quality video service. This reliability is crucial for running applications such as Voice Over Internet Protocol (VoIP) in video conferencing, which are prone to latency and other disruptions. MPLS, IP, and VPN services provide ample bandwidth between the service provider network and the user's site, meeting the demands of VoIP effectively. The surge in demand for video conferencing solutions stems from global trends toward remote work, virtual meetings, and distance learning engendered by the COVID-19 pandemic.

Regional Insights

North America dominated with a revenue share of over 34.0% in 2023.Various factors are driving the growth of MPLS IP VPN services in the region, such as the rising demand for secure and reliable connectivity, burgeoning bandwidth-intensive applications, and expansion of geographically distributed enterprises. Moreover, technologies such as video conferencing, high-definition streaming, and the Internet of Things (IoT) are driving the demand for higher bandwidth. MPLS, IP, and VPNs can provide the requisite bandwidth for these applications to function optimally.

U.S. MPLS IP VPN Services Market Trends

The MPLS IP VPN services market in the U.S. is expected to witness significant growth over the forecast period. The U.S. e-commerce sector is growing at an accelerated pace, which heavily relies on efficient and secure data transmission. MPLS IP VPNs ensure smooth online transactions and better customer experiences. Moreover, the U.S. government is a major spender on IT infrastructure, and MPLS, IP, and VPN services are often used to connect government agencies and secure communication.

Europe MPLS IP VPN Services Market Trends

The MPLS IP VPN services market in the European region is expected to witness significant growth over the forecast period. Europe is a hub for multinational enterprises with branches dispersed across the globe. MPLS IP VPNs offer a secure and reliable way to connect these locations and facilitate seamless data exchange across borders. Moreover, the European market is mature, with established players such as British Telecommunications plc, Orange S.A., and Deutsche Telekom AG offering MPLS IP VPN services. This leads to intense competition, driving innovative products for its customers.

Asia Pacific MPLS IP VPN Services Market Trends

The MPLS IP VPN services market in the Asia Pacific region is anticipated to register rapid growth over the forecast period. The Asia Pacific (APAC) region presents a dynamic and fast-growing market for MPLS IP VPN services. Economic expansion across various APAC countries is fueling demand for secure and reliable network connectivity to support business growth. Urbanization, on the other hand, also drives the need for efficient data transmission infrastructure. Cloud computing is gaining traction in APAC, with businesses migrating applications and data to the cloud

Key Multi-protocol Labelled Switching, Internet Protocol, Virtual Private Network Services Company Insights

Key MPLS IP VPN service companies include AT&T INC., British Group plc, Lumen Technologies., and Cisco Systems, Inc. Companies active in the MPLS IP VPN services market are focusing aggressively on expanding their customer base and gaining a competitive edge over their rivals. Hence, they pursue various strategic initiatives, including partnerships, mergers & acquisitions, collaborations, and new product development. For instance, in April 2024, British Telecommunications plc introduced IP Connect Global, a Multiprotocol Label Switching (MPLS) VPN designed to provide users with secure connectivity. The product ensured businesses access to secure, high-quality, and dedicated bandwidth connections.

Recent Developments

• In March 2024, Verizon Communications Inc. introduced Private IP Network Solutions, an MPLS network that connects clouds and locations around more than 185 countries in the world. In this network, traffic is completely isolated from the public internet for higher security.

• In February 2024, Cisco Systems, Inc. updated the NX-OS Software in response to a denial-of-service vulnerability found in it when handling MPLS traffic. Through the company’s update channels, customers with service contracts that include regular software updates could obtain the security update.

• In February 2023, AT&T Intellectual Property introduced the AT&T Virtual Private Network (AVPN), a network-based multi-protocol label switching service that allows customers to establish an application-aware virtual private network that connects customer sites and seamlessly transfers various applications such as data, video, and voice through a single connection.

Multi-protocol Labelled Switching, Internet Protocol, Virtual Private Network Services Market Report Scope

Global Multi-protocol Labelled Switching, Internet Protocol, Virtual Private Network Services Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global multi-protocol labelled switching, internet protocol, virtual private network services market report based on service, application, deployment model, industry, and region:

• Service Outlook (Revenue, USD Million, 2017 - 2030)

  • Layer 2

  • Layer 3

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Automated Machines

  • Video Conferencing

  • Audio Conferencing

  • Others

• Deployment Model Outlook (Revenue, USD Million, 2017 - 2030)

  • Managed Services

  • Self-Services

• Industry Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • Healthcare

  • IT & Telecom

  • Government

  • Education

  • Retail & Consumer Goods

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • South Korea

  • Latin America

    • Brazil

  • MEA

    • UAE

    • South Africa

    • KSA