IDC says IP VPN is Malaysia's fastest growing managed data services

01 September, 2005

Kuala Lumpur, September 01, 2005 – Based on IDC's latest study entitled Malaysia IP VPN Services 2005 – 2009 Forecast, the managed IP VPN services market in the country is expected to grow strongly in 2005, with an expected 2005 growth rate of 52%, from a revenue of RM193 Billion in 2004. This is expected to propel IP VPN services to be the fastest growing managed data services in the country.

The Malaysian managed IP VPN industry has progressed in great leaps and bounds in 2004, following Telekom Malaysia's heavy investment in developing the company's IP VPN multiprotocol label switching (MPLS) backbone. Despite the lackluster approach in the marketing of IP VPN services (even after such heavy capex), it appears that IP VPN adoption is now a demand-side push, with enterprises and institutions in Malaysia aggressively demanding these services for their corporate WANs. "Although there has been heavy capex expenditure by service providers in rolling out their IP VPN architecture, service providers still maintain a hesitant outlook in pushing for a migration path for their customers", according to Lincoln Lee, Senior Analyst of Enterprise Networking and IP Communication Research, IDC Malaysia. "This is especially noted in service providers who with a large base of frame relay and leased-line customers are known to exhaust all options including offering enticing discounts to retain their frame relay and leased-line customers before proposing a managed IP VPN solutions. After all, these service providers have already invested heavily in their traditional managed data services equipment and infrastructures, which have yet to reach the ROI that was originally forecast", Mr. Lee added.

Although IDC expects strong growth from the managed IP VPN services market, it should be noted that there is also strong growth from the DIY IP VPN. "Without a doubt, the possibilities and benefits of IP VPN are well recognized by IT managers in Malaysia. Unfortunately for IP VPN service providers, IP VPN's do-it-yourself (DIY) implementation remains a serious competitor of their suite of managed IP VPN services," says Mr Lee. “With the constant improvement in equipment technology, IT managers are finding it easier to roll out and manage their own IP VPNs, without the help of service providers. This trend is becoming more popular, especially among companies with full-fledge IT support teams, which are capable and experienced enough to manage the technology”, he adds.

For more information about this research, kindly contact Hazmi Yusof at 603-2169-7522 or hyusof@idc.com, or Stephen Chong at 603-2169-7521 or ckchong@idc.com.

Contact

Chee-Kian Chong
Events & Marketing Executive
Tel: +603-2169-7521
Fax: +603-2163-5098
Email:ckchong@idc.com