The Greening of DPI

The deep packet inspection (DPI) market is going green – as in, racking up some serious revenue. Some vendors are seeing revenue growth rates of 30 percent or more quarter-on-quarter. After a couple of years of strong growth in Europe and Asia/Pacific, the demand for DPI products is now ramping up in North America as well.

By 2010, the total worldwide market for DPI products will hit the $1 billion mark, according to the latest edition of Light Reading Insider – Deep Packet Inspection: Vendors Tap Into New Markets – which explores and analyzes the DPI sector and its leading suppliers. That's a huge jump from this year's revenue base, which is expected to be somewhere below $400 million.

DPI's market growth is being fueled in part by the new ways in which network operators are learning to use it. DPI was initially deployed simply to see what is going on in networks, but it's now increasingly being used to control and shape traffic. DPI is also used to provide additional network security (driven by the need to stop increasing numbers of viruses, botnets, and denial-of-service attacks from clogging up networks).

Network operators are also starting to use DPI to create services that are differentiated according to the way they deal with various types of applications. Services tailored to promote own-brand or partner services have already emerged, and services tailored per application, per subscriber, can be expected to emerge soon. As our report details, DPI can play a big role in developing these new types of revenue-generating services.

Where DPI vendors once had to convince customers of the merits of deploying their technology at all, it is now more a question of where operators want it deployed and how they want to leverage the knowledge that DPI offers. There is now little question about whether there is a need to see what is traveling through a network at all.

To date, DPI deployment has centered on wireline broadband networks. But the big opportunity for DPI vendors is the mobile market: Mobile networks are struggling to cope with the increasing data volumes generated by customers with latest-generation phones or devices equipped with mobile broadband. As HSDPA, HSUPA, and CDMA EV-DO Rev. A and B are more widely deployed, this problem will get worse – much worse. There are many millions more mobile devices worldwide than there are broadband connections. As these mobile devices are upgraded to accommodate broadband data services, the acute need to manage data traffic and the opportunity to provide tailored, differentiated services to customers will mean a strong increase in deployment of DPI technology by mobile operators.

The mobile market has some catching up to do in terms of market size. But taking into account the likely rates of mobile technology introduction and handset replacement, and the impact these will have on data volumes, we expect mobile operators to account for the majority of DPI spending by 2011. From then on, the growth of the mobile market will outpace the fixed market, creating a much bigger global market opportunity for vendors.

— Simon Sherrington, Analyst, Light Reading Insider

Deep Packet Inspection: Vendors Tap Into New Markets, a 24-page report, is available as part of an annual subscription (12 monthly issues) to Light Reading Insider, priced at $1,595. This report is available for $900. To subscribe, please visit: www.lightreading.com/insider.