Tracing the Advantages of Virtual Customer Premises Equipment (vCPE) and Growth Opportunities in the Industry

A new trend that is being witnessed in the digital technology sector is the replacement of hardware equipment with software applications which perform the same function. Virtual customer premises equipment (vCPE) is a real-time example of this technology. This idea refers to replacing hardware equipment including routers, VPNs, and firewalls with software applications which make use of cloud services.

Advantages of using virtual customer premises equipment

Different types of virtual customer premises equipment have gained a lot of popularity in the last few years due to the benefits offered by these tools. The most important benefit of using this technology is the overall reduction in the cost of equipment. Since software applications are cheaper than hardware equipment, the cost of equipment reduces. Also, the repair and maintenance cost and the logistics and installation costs are reduced. Thus, virtual customer premises equipment (vCPE) is quite simpler in its approach to providing services as opposed to complex hardware equipment.

Nowadays, most businesses are adopting cloud services and software-as-a-service (SaaS) models. These models offer better flexibility, efficiency, and reliability as compared to hardware equipment. Also, cloud services and SaaS models allow for easy integration with virtual customer premises equipment. Thus, the service agility offered by cloud services and software-based equipment is much higher as compared to their hardware counterparts. Another important utility of software-based equipment is that they allow for customization and delivery of personalized services. Generally, virtual customer premises equipment offers a customization dashboard or portal wherein customers can modify the services or try new services.

Growth opportunities for the industry

As said earlier, the primary growth driver of the virtual customer premises equipment (vCPE) market is the several advantages offered by different software-based equipment. According to a published report by Allied Market Research, the market is predicted to grow at a substantial CAGR of 41.4% in the 2023-2032 period. Apart from the above-mentioned advantages, the increasing pace of deployment of 5G services across the entire globe is another vital growth driver of the market.

The rising shift towards network virtualization which has been adopted by many small- and medium-scale businesses, along with large corporations has also contributed to the expansion of this industry. Many experts have pointed out that the decreasing reliability of hardware equipment is the main reason behind this shift towards network virtualization.

The virtual customer premises equipment market has presence of several multinational technology companies such as Intel Corporation, Huawei Technologies Co., Ltd., Cisco Systems Inc., Hewlett Packard Enterprise Development LP, etc. These companies have already established themselves as the leaders of the industry and are investing heavily in research and development activities. To compete with these corporations, other companies are entering into strategic alliances with each other. For instance, in January 2020, Accedian and Lanner Electronics Inc., entered into a partnership to develop state-of-the-art virtual customer premises equipment. Such collaborations have not only helped these companies to compete with the multinational corporations, but also helped in pushing the growth rate of the market higher.

The virtual customer premises equipment (vCPE) market, to summarize, is set to expand massively in the coming period on account of the advantages of software-based equipment. Growing deployment of 5G services, increasing adoption of network virtualization, and strategic alliances will offer a helping hand in surging the growth rate of the market.

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