The virtual private network (VPN) market breached the $17 billion market value in 2017 and is expected to grow at a CAGR of about 15% through 2014, which means that it will surpass the $20 billion mark by the year 2020.
This growth has attracted many players in the market but still, only a few stand out as they fight for a share of the market. While the perennial giants are expected to dominate in the competitive landscape, new companies rising in the VPN business like Surfshark will also pose a significant challenge to industry veterans with their unique and disruptive products.
Ideally, the competition will be raging across all three main verticals including hardware, software, and services. Analysts expect more intensity in the services market, a segment of the industry that will also witness the highest growth.
VPN Market growth catalysts
The growth of the VPN market will be driven by four main catalysts. Some of these are clear and obvious to many while others are a little hidden and harder to comprehend.
Growing insecurity of Wi-Fi Connections: public Wi-Fi has been one of the driving forces behind the rapid growth in demand for VPN services on mobile devices. While connecting to the internet via a computer at home may provide a considerable degree of security, when using your mobile phone or laptop to connect to a public Wi-Fi at your local cafe may provide real security issues.
Hackers now target Wi-Fi connected devices to steal personal information which they can then use to commit criminal activities. As such, more people are now investing in VPN services that also offer protection across several devices.
Internet censorship boosts the demand for VPN services: This is another huge force behind the rapid growth of the VPN market. While most countries have relaxed policies for internet usage within their borders, some are still very strict, and to this date, have implemented internet censorship protocols to limit what their residents can send and view online.
China is the most popular country when it comes to internet censorship while the likes of Turkey follow closely. To bypass the censorship protocols and firewalls set by these countries, residents are forced to use a VPN, which then masks their IPs to connect to the internet as if they were located in a different country.
A rapid rise in breaches on information-rich platforms: This is perhaps the primary reason why most people are becoming more cautious about the security of the information they submit online.
After the Cambridge Analytica debacle, which exposed Facebook’s weakness in securing the privacy of user data, more people are now taking matters into their own hands by protecting themselves from such threats through the use of VPNs. This is driving the global demand for virtual private network connections.
A significant shift from cable TV to streaming services: Since the emergence of Netflix back in the late 1990s, several companies have joined the bandwagon of online video streaming services. The latest as of this writing is the US-based AMC, which launched a service to challenge the likes of Netflix, Hulu, Amazon Prime Video and ABC All Access among others.
The challenging issue with this move is that these providers filter the content based on location, which limits what viewers can watch at a given time. To bypass this obstacle, subscribers to these streaming services have shifted focus to using VPNs, which masks their real locations thereby giving them access to all content.
In summary, the global VPN market is expected to witness exponential growth in the coming years. This is mainly due to rapid growth in the demand for VPN services driven by the four catalysts discussed here.
In response to this growth, new and existing VPN service providers will be battling to gain a share of the market as they seek to boost their toplines in a highly competitive market.