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