Policy, information technology  

European e-health initiatives boost virtual private networks

15 January 2006

London. The European Union (EU) e-health initiatives have positively affected the uptake of Internet Protocol Virtual Private Network (IP VPN) in the healthcare segment. While the ability to provide reliable network security and enhanced connectivity is expected to further underline the appeal of IP VPN, relatively low ICT expenditures by financially constrained governments and healthcare organisations loom as a formidable challenge to sustained market expansion.

Despite such budget restraints, the European healthcare segment offers exciting growth potential for information and communication technologies (ICT) service providers and equipment vendors. The accession of eastern European countries to the EU is likely to boost demand levels with IP VPN uptake set to particularly impact areas such as patient data, security, telemedicine technologies and hospital administration.

"The European healthcare industry represents ten per cent of the total IP VPN services market's growth potential at the moment," says Frost & Sullivan Research Analyst Lucy Liu. "This is evident from the rapid uptake of IP VPN services in the last six months which hiked the market growth rate to 40 per cent due to the increased demand in the healthcare ICT industry."

Recent health regulations reflecting the inherent sensitivity of health information have highlighted the need for increased privacy and security for patient records. At the same time, mass digitisation of patient and healthcare data require data sharing and secure networking. IP VPNs provide secure remote access for doctors to access patient's records in a protected and cost-effective way thus becoming the ideal telecommunication service.

The protection of health information is critical due to the sensitivity of the data shared electronically between hospitals, doctors' offices, laboratories, pharmaceutical companies, suppliers and other Medicare establishments. Here, IP VPNs with integrated firewalls are fast becoming the mainstay of network security. The move towards a fully integrated, single sign-on system has now made network security easier for IT administrators to set up and for hospital staff to use, thus driving demand for IP VPNs by the healthcare segment.

However, despite the desire of many healthcare organisations to switch to IP VPNs, their legacy network contracts need to expire before they can migrate to this technology. Moreover, the high cost of IP-based customer premise equipment (CPE) combined with the pipeline status of the virtual healthcare environment is hampering extensive uptake of IP VPNs.

Although these limitations have the potential to impede the market, the need to reduce costs and increase efficiency assures rising adoption of IP VPNs by hospitals. Moreover, the future of IP VPN uptake is secure due to its multiple benefits.

An IP-based VPN allows interoperability of different vendors' products, which gives customers increased flexibility and choice for network vendors and products. Next-generation broadband networks sponsored by governments provide great opportunities for telemedicine and telehealth services because areas in which a broadband network is already in place will have the added benefit of faster deployment, which will further enhance adoption prospects.

"The European IP VPN services market is highly competitive at the moment," concludes Ms. Liu. "Service providers face many big challenges, which have forced them to align service strategies accordingly. The effective approaches include deploying the push and pull strategies, building up strong business cases to demonstrate ROI and following a vertical approach."

More information: http://telecom.frost.com

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