Is the VPN industry going through a boom and bust cycle? Jan Youngren, cybersecurity and consumer protection specialist at VPNpro explains that while the industry is seeing a boost from remote work, in the long-term VPN sales may go down, as they are non-essential items.
But in this context, free VPN providers might be the winners, considering many paid VPNOpens a new window users may switch over. It is true that free VPNs are also susceptible to reduced incomes – many of them are funded through ad revenue and advertising budgets are bound to fall in the event of a recession. However, if free VPNs can monetize the increased demand for free VPN services, then they should have a very good few years ahead of them.
COVID-19 has hit hard, and much of what we knew about this world has changed in a matter of weeks. One of the things that has changed is we are spending a lot more time at home. And many of us are using that additional home-time on the internet – streaming, gaming, socializing.
Today, we look at the situation in the VPN industry and the possible scenarios for its future.
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Interest in VPNs is Growing
Currently, around four out of five Opens a new window Americans are in lockdown, with many working from home. This situation implies increased interest in VPNs, which are often used to keep sensitive work information private, or to gain access to geo-restricted content online.
We carried out a survey at VPNproOpens a new window to see the impact of the pandemic on VPNOpens a new window usage. We looked at both Google Trends results and the information provided by some of the most popular VPN companies.
Source: VPNpro
According to data gathered from Google Trends, it seems there is increased interest and a correlation with the spread of the coronavirus. In nine of the ten countries you can see above, interest peaked in the third week of March. In Italy, however, interest in VPNs started increasing in the second week of March, consistent with the quarantine being announced one week earlier in this country.
Around the same time, another research was conducted by Atlas VPNOpens a new window . They published data confirming that Atlas VPN use in Italy increased by 112%, and by 53% in the US. Keep in mind, that the results were released before the US became the country with the highest number of infections.
Providers See an Increase in Sales
As a part of our survey at VPNpro, we reached out to some of the most popular VPN providers to get more data. Eight out of nine confirmed that their sales or the usage of their products is now higher compared with before the quarantine.
- Surfshark VPN saw usage in Turkey triple, while in Italy, Portugal, and Germany it doubled
- NordVPN Teams was purchased four times more in The Netherlands, Austria, and Canada
- For Hola VPN, sales have doubled in the US, Russia, Italy, Spain, and Turkey
- Hide My Ass VPN sales in Italy have also doubled
The statistic from NordVPN Teams in particular is telling: the growth in NordVPN Teams purchases (165% increase in users across the globe) means that the VPN industry is also seeing a boost from the remote-work crowd, not just the Netflix-and-chill crowd.
But what if the situation continues?
None of us know for sure when the coronavirus threat will be eradicated. Therefore, different scenarios are possible for the entire VPN industry.
At the moment the VPNOpens a new window industry is among those experiencing a sharp increase in demand. If we are lucky enough to get out of this pandemic sooner rather than later, the VPN industry should continue growing, but at a much more moderate pace.
It’s also possible that a very different kind of situation will occur. The current quarantine is taking a heavy toll on the global economy, which could lead to yet another recession. This would mean lower incomes for people almost across the board. In that scenario, VPN sales may go down, as they are non-essential items.
But in this context, free VPN providers might be the winners, considering many paid VPN users may switch over. It is true that free VPNs are also susceptible to reduced incomes – many of them are funded through ad revenue and advertising budgets are bound to fall in the event of a recession. However, if free VPNs can monetize the increased demand for free VPN services, then they should have a very good few years ahead of them.
On the positive side, it also seems almost inevitable, regardless of the length of the pandemic, that the importance of enterprise VPNs will grow. Firstly, VPNs are certainly not “non-essential items†for businesses. Secondly, the quarantine has demonstrated that remote work on a large scale is possible, and in some cases arguably even more effective.
Current B2C VPN providers seem to agree – quite a few of the top VPNs have already introduced some form of a B2B solution.
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The Price of Free VPNs
The issue with customers potentially shifting to free VPNs is that there are only a few decent ones currently on the market. In fact, more often than not, opting for a free service means sacrificing your online anonymity and security. These apps often track user behavior and expose them to serious security vulnerabilities or even malware.
For example, according to our research on free VPNs, 10 of the most popular free VPNs on the Google Play store had critical vulnerabilities that could expose nearly 120 million users to a man-in-the-middle (MITM) attack. These security holes allow hackers to monitor user traffic, effectively spying on all of their online activities.
Moreover, free mobile VPN apps are proven to put their users’ privacy at risk. According to an investigation of 150 free mobile VPN apps conducted by Top10VPN.com, 25% exposed users to DNS, WebRTC or IP leaks. App stores, despite being informed about the dangers of these free VPN apps, continued offering them to customers.
With increased profits, all these realities could certainly change, but there’s bound to be some growing pains until that happens.
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Boom or Bust?
Our month of quarantine is the VPN industry’s honeymoon. But what comes after the pandemic profits have been counted?
The answer may be different for each segment of the VPN industry, which all rely on different factors for success. A lengthy quarantine followed by a recession would likely be painful to paid B2C VPNs, at least for a while. Other VPN industry parts, such as Free VPNs and especially B2B VPNs, should do better.
Whatever the case, it seems clear that VPNs are not going anywhere – in one form of another, their relevance will remain and likely grow.
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