The development of vertical-cavity surface -emitting lasers (VCSELs) has led to new types of low power, high efficiency light sources for data communication. The small size, low power, and surface-normal emission of VCSELs has enabled relatively dense 2D arrays for highly parallel data communication and optical signal processing. In this paper we examine the issues of device scaling on VCSEL performance. We look specifically at what benefits may be derived from continued scaling of the active volume down to minimum sized dimensions, and what device schemes may be required to obtain the dimensions, a significant improvement in modulation speed is predicted based on the radiative lifetime change due to the Purcell effect. However, several parasitic effects must be controlled in order to realize these benefits. Most important are control of the optical loss due to diffraction or scattering,and control of the electronic losses due to carrier diffusion and surface effects. Novel optical confinement schemes based on oxide- apertures, photonic bandgaps, and/or closely coupled 2D array may be useful for controlling optical loss, while self-assembled quantum dots are attractive for controlling electronic diffusion to dimensions within the minimum optical mode volume.