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Demand for network services to remain hearty

A new study forecasts that corporate demand for network services will remain strong, despite a rash of communications network construction and the subsequent financial shakeout.

    A study released Monday forecasts that corporate demand for network services will remain strong, despite a rash of communications network construction in recent years and the subsequent financial shakeout.

    The hottest areas of growth will include broadband Internet access, secure VPN (virtual private network) connections, network security products and services, and network management tools, according to Infonetics Research, a networking research firm.

    By 2005, 50 percent of small businesses will use a VPN for remote access, up from 13 percent in 2000, the study shows. Among medium-sized organizations, 57 percent will have DSL (digital subscriber line) Internet connections by 2005, compared with 35 percent today, Infonetics said.

    In addition, 84 percent of large corporations will connect remote office sites with a VPN, up from 56 percent currently, according to the survey, which was based on interviews with 1,400 small, medium and large businesses.

    Despite the communications sector downturn late last year, Infonetics says businesses continue to need network services to differentiate themselves from their competitors.

    "The users aren't done buying services," said Jeff Wilson, executive director at Infonetics and author of the study. "And as they buy and build new networks, the carriers have to continue to build.

    "There are few people who would assert that any part of the Internet infrastructure is overbuilt," Wilson said. "If history is any teacher...we always underestimate how much we'll use."

    Wilson said the past six months, which have seen financial troubles for the communications industry, will merely serve as a shakeout.

    "Once the bad ideas get weeded out and the economy comes back, the communications sector will come back stronger," he said. "Someone forgot to tell businesses to stop buying these services."