Virtual private networks (VPNs) based on the Internet Protocol (IP) will be the next big step in communications networking, according to Eddie Murphy, senior consultant at telecoms analyst Analysys. 'The global market for IP VPNs will top $6.5bn in 2006. IT managers should watch this technology because it's the way the corporate network will go,' said Murphy.
Analyst group IDC puts that figure even higher, at $10bn by 2005, but what are the attractions of the technology for corporate IT managers? Rod Jones, senior technology manager for Nortel Networks, noted that large firms have been deploying Layer 2 VPNs, with asynchronous transfer mode (ATM) or frame relay services, since the early 1990s.
However, the Internet has now taken VPNs into Layer 3 of the network, enabling VPNs to be extended to remote offices and individuals around the world, while keeping costs down.
Tom Plimmer, European vice president at VPN developer Asita Technologies, said, 'VPNs provide networks users with a convenient and secure means to remotely access their corporate data and communicate with their business partners.' This increased range does not necessarily result in increased costs. A recent report from analyst firm Infonetics Research suggested that VPNs can actually reduce remote access dial-up costs by between 60 and 80 percent.
However, IT managers need to be careful about the solutions they deploy, giving close attention to authentication, security and access policies. Allan Wall of VPN developer Symantec, said, 'Customers need the ability to control what and where a partner or remote branch office can access. Therefore, authorisation, authentication, data encryption and policy management become key elements of their VPN purchasing decision.'
Firms should also analyse where VPNs are most effective in tightening network security, especially if they are to be used in conjunction with other data protection tools such as firewalls. Plimmer said, 'If you have the VPN unit behind a firewall and NAT [Network Address Translation] then it won't work. If you put it in front of the firewall then you don't know what was secure and what was not. If you put it beside the firewall then you have a security threat and a routing problem for applications.'
The task of implementing a VPN is divided between the network manager and the service provider, depending on the level of responsibility the network manager chooses to maintain. An Internet service provider (ISP) may simply offer IP bandwidth, leaving the network manager to run the rest, or they may offer a totally managed VPN solution. 'The best ISPs will offer a range of VPN options, allowing you to choose how much of the task to outsource and how much control over the network infrastructure you require,' said Plimmer.
Analysts say that VPNs offer a good opportunity for service providers to make badly needed revenues. Current VPN service providers include Colt, Cable & Wireless, BT, Energis and Equant. But according to Murphy, many providers are not offering services that meet firms' needs.
Research suggests IT managers across Europe prefer to run VPNs on equipment on their own premises. Infonetics said corporates should look at availability, repair times, transit times and delay characteristics when considering VPN technology.
A business information manager at an aerospace firm said that deploying VPNs had opened up new areas for his firm. 'Our business systems have been deployed from the Cambridge server room to outstations in Canada, Australia and South Africa, at just the cost of a software licence for the VPN on client machines and the hardware on our corporate firewall. We have been servicing aircraft overseas using all our Cambridge-based systems  something that would have cost a fortune in leased lines just a few years ago,' he said.
