The Meteoric Rise of the VPN Industry


(MENAFN- MENAFNAuthors) As of 2019, 1 in 4 people use a VPN (Virtual Private Network). That may not seem like a lot until you realize there are almost 4.5 billion Internet users worldwide. So over half the planet uses the Internet, and a quarter of that uses a VPN!


How did it get this way? Let’s find out.


From Basics to Booming Industry

In 1996, then software-engineer for Microsoft, Gurdeep Singh Pall, co-designed the first VPN protocol. The now mostly obsolete and insecure Point-to-Point Tunneling Protocol (PPTP) was a way for users to share data through secure “tunnels,” allowing a modicum of security even when working from home.

In the meantime, VPNs were mostly corporate and individual business-level tools and didn’t really see much home usage aside from the case above.

As security flaws in PPTP were eventually discovered, new protocols such as L2TP/IPSec and OpenVPN were created to meet the changing landscape of the online world. Network speeds increased, and cyber threats became more widespread as a result. There was a higher demand for VPNs even from home users looking for protection, and so new providers sprung up like mushrooms to capitalize on it.

But online privacy wasn’t the only thing people were looking for. Peer-to-Peer (P2P) downloading was in full swing on services like Kazaa and LimeWire, as well as torrent sites like ThePirateBay. Users were looking for a way to anonymize their downloads, and VPNs with their IP-hiding capability were the obvious solution.

An unfortunate (but predictable) side effect was, of course, the rise of “free” VPNs which actually sold off their users’ data to malicious third parties and advertisers.

By the early 2010s, the VPN industry had begun shaping up into what we know today. The real growth, however, started in 2013 with the Edward Snowden revelations. You probably know the gist of it, but in short Snowden’s whistleblowing uncovered global surveillance programs that were described by some courts as “Orwellian.” Understatement of the century? You decide.

 

Government, Corporate, and ISP Surveillance

What really sent VPN usage flying was the ability of government and corporate bodies to track peoples’:

  • Browsing habits and downloads
  • Online spending and communications
  • Every movement through geo-location technology
  • Much, much more

 

Understandably, people did not want to take part in a modern retelling of “The Truman Show.” Nor did they want their Internet habits sold to advertisers by their own ISPs (Internet Service Providers).

In the months following the Snowden debacle, encrypted (i.e. obfuscated from outsiders) web traffic saw over twice the increase. According to Wired, much of that change is attributed to attempts by Facebook and Google to get more of the Internet to use the secure version of the Hypertext Transfer Protocol (HTTP), i.e. HTTPS (HTTP Secure).

It’s safe to say that VPNs played their part in this change as well. As an aside, the irony of two of the most privacy-invasive corporations seeking to improve online privacy cannot be overstated.

 

Internet Censorship

It’s no secret that countries such as China, Vietnam, and others aren’t friends with Internet freedom. Journalists and bloggers are regularly persecuted and imprisoned (or worse) for exposing government corruption, while regular citizens are punished for going against state policy online.

This has also led to an increase in VPN usage in those parts of the world. In fact, several of the top 10 VPN markets have Internet censorship issues. Unfortunately, those governments are also looking to outright ban VPN usage to gain complete control over their populations’ online activity.

Indirect attempts at censorship are present elsewhere too. Recent EU copyright directives such as the infamous “Article 13” would make it a nightmare for sites like Twitter, YouTube, and so on to keep up the free flow of information. This means the censorship won’t be limited to the EU, as the social media giants will have no choice but to apply the copyright directives across their entire platform. That, or risk billions in fines and impossible infrastructures to filter out content from the EU.

 

Geo-Blocking Increases

Speaking of regulations affecting the Internet, we can’t forget about the GDPR’s effect on freedom of information. Many non-EU websites basically closed their doors to EU users due to various reasons. Some believed the regulations were too strict and expensive to implement; others simply didn’t bother because they didn’t have a large enough EU viewership to count.

Whatever the case, VPN usage has once again shot up due to this geo-blocking. People simply want access to a website or service without being hit by an error message. This isn’t limited to geo-blocking due to government regulation, either.

It’s well known at this point that YouTube geo-blocks videos from certain countries due to licensing issues, or at the request of copyright holders. The same can be said about streaming platforms such as Netflix in the US, or BBC iPlayer in the UK. It’s estimated that over half of current VPN users are primarily motivated by getting around geo-blocks and accessing the entertainment they want.

Not many VPNs are successful at unblocking those services, as Netflix & co. try their hardest to curb their usage. Some still manage to slip through the cracks. PureVPN is excellent for streaming content, for example, due to it offering “dedicated IPs” strictly for using those streaming platforms. 

 

What Does the Future Hold for VPNs?

We’ve covered most of the bases when it comes to why the VPN industry will expand in the coming years:

  • More people are becoming aware of the importance of online privacy due to frequent privacy scandals and cyber threats
  • Blatant Internet censorship isn’t stopping any time soon
  • Every major conglomerate is getting its own streaming service nowadays. People want easy access to entertainment content without geo-blocking getting in the way

 

If you need more concrete proof, it’s estimated that by 2022 the VPN industry will grow to $36 billion – more than doubling in size from the “mere” $15.6 billion in 2016.

 

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