U.S. SMBs Will Spend $6.5 Billion on IP VPN Services in 2012, Report Finds

NEW YORK, July 24 /PRNewswire/ -- The need for high-quality, high-performance network connectivity will drive U.S.-based small and medium-size businesses (SMBs) to spend heavily on IP VPN managed services over the next five years, with annual revenues rising from less than $2 billion last year to more than $6.5 billion in 2012, according to the latest report from Light Reading Insider (www.lightreading.com/insider), a paid research service of TechWeb's Light Reading (www.lightreading.com).

Managed IP VPN Services: SMB Market Opportunities analyzes the market opportunity for U.S. network operators selling IP VPN managed services to SMBs. It lays out the expectations that SMB customers have for IP VPN managed services, including key technology features, service management, and cost factors. The report also addresses the specific issues that managed services providers must address to build their SMB customer base, focusing on the key differences between the SMB sector and the large-enterprise market. Different technology approaches to delivering IP VPN managed services to SMBs and marketing strategies are analyzed. The report also profiles 10 emerging IP VPN managed services providers that specifically target the SMB sector.

For a list of companies analyzed in this report, please visit: http://img.lightreading.com/lri/pdf/lri0708companies.pdf

"The SMB market is the next great networking frontier," says Charles Carr, research analyst for Light Reading Insider and co-author of the report. Presently, the total U.S. managed IP services market is split between two networking solution types: "Within the IP VPN market, the SMB sector is clearly a sweet spot for service providers and is projected to grow at a compound annual rate of 28 percent, versus only 12 percent in the large-enterprise space through 2012."

SMBs that have relied on legacy Frame Relay services need more robust and flexible connections to remain competitive, Carr notes. "SMBs need the flexibility and scaleability of a more robust networking solution, such as the MPLS/IP virtual private network," he says. "For this reason, SMBs represent a clear and attractive market opportunity for providers of managed IP VPN services."

Key findings of Managed IP VPN Services: SMB Market Opportunities include:

-- Service providers now consider managed MPLS/IP VPN network solutions critical to a winning strategy in the U.S. SMB market

-- Indirect marketing/sales channels will dominate service providers' go-to-market strategies and currently account for the majority of managed IP VPN sales in the SMB market

-- The biggest challenges facing service providers are setting expectations through SMB education and developing a cost-effective long-term partnership with SMB customers

-- New network deployment in the SMB markets is now entirely IP-based VPN, which will dominate network revenue generation in SMB by 2009

Managed IP VPN Services: SMB Market Opportunities provides critical insight and analysis for a range of industry participants, including:

-- Network operators needing insight into the key issues that are driving SMB demand for IP VPN managed services, the network operators that are most aggressively targeting SMBs with IP VPN services, and the likely uptake of IP VPN services by small to midsized business customers

-- Technology suppliers looking for independent market intelligence that quantifies the market opportunity for IP VPN services in the SMB sector, as well as identifying the network operators that are moving most aggressively into the SMB space

-- Investors needing a better understanding of the scale of the opportunity that IP VPN services presents network operators and technology suppliers

Managed IP VPN Services: SMB Market Opportunities is available as part of an annual single-user subscription (12 monthly issues) to Light Reading Insider, priced at $1,595. Individual reports are available for $900 (single-user license).

To subscribe, or for more information, please visit: www.lightreading.com/insider. For more information on all of Light Reading's Insider services, please visit www.lightreading.com/research.

To request a free executive summary of the report, or for details on multi-user licensing options, please contact:

    Jeff Claudino
    Director of Sales
    Insider Research Services
    619-229-9940
    claudino@lightreading.com

    Press/analyst contact:

    Dennis Mendyk
    Managing Director
    Insider Research Services
    201-587-2154
    mendyk@heavyreading.com

About Light Reading

Founded in 2000, Light Reading (www.lightreading.com) is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. It reaches an extensive audience of executives and technologists within the telecom and enterprise networking communities, as well as the financial/industry analysts and investors who track these sectors. Light Reading was acquired by United Business Media in August 2005, and operates as a unit of UBM.

About TechWeb

TechWeb (http://techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events Interop, Web 2.0, Black Hat and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, Wall Street & Technology magazines. TechWeb also provides end-to-end services ranging from next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than $2.5 billion.

* 13.3 million business decision-makers: based on # of monthly connections

SOURCE Light Reading

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