August 28, 2000

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VPNs: Changing Technology, Same Purpose

By Norbert Turek

irtual private networks still mean many things to many people, chiefly because VPNs have evolved so much over the years. But as Ovum Inc. research director David Lewin says, "while the technology has changed, the business purpose remains the same."

Early VPNs were circuit-switched voice networks from companies such as AT&T, MCI, and Sprint. Lewin says the carriers were able to offer lower network rates to large customers using these VPNs, thereby getting around federal rate-control regulations, while the carriers got better network utilization.

The next use of VPNs came with frame relay and asynchronous transmission mode private virtual circuits, which were designed to replace very expensive private lines by increasing the reliability and security of business traffic over shared carrier backbones. These circuits were originally designed for large multinational companies, but they've become the standard method for high-reliability data and voice transmissions.

VPNs have also come to mean any shared network that leverages security technologies to keep one customer's data traversing the network private from another's. But Jim Slaby, an analyst at Giga Information Group, says that the best generic use of the term is "a private network built on public or shared infrastructure."

The highly touted IP-based VPNs, which emerged as the next big wave in data communications in the second half of 1997, are based on standard, ubiquitous, and easily accessible IP networks--the public Internet as well as private IP systems run by carriers or user companies themselves. IP VPNs rely on encapsulating protocols such as Internet Protocol Security and Microsoft's Point-to-Point Tunneling Protocol. The virtual privacy is derived from secure tunnels that encapsulate the data as it moves across the shared lines. That's a fair-enough proposition, but businesses have yet to entrust their most important apps to the Internet--simply because the Internet is still less reliable than ATM and frame relay networks.

Reliability issues are compounded in global scenarios. Internet service around the world varies widely in reliability. "In the domestic United States and Canada, performance is great," says Bill Wagner, VP of marketing at Fiberlink Communications Inc. "But when you talk about Western Europe, performance falls off. And in South America, it falls off even more. No one is going to get 90% availability in South America."

The reliability issues and virtual private networking's checkered past have given rise to the latest incarnation of VPN services. These services let companies cash in on investments made in their more reliable frame relay and ATM lines while providing a path toward more economical IP-based networks. These new services also blend dial-in access for remote and mobile users with dedicated pipes so customers can establish site-to-site connections.

From Lewin's point of view, business users of the new VPNs get a far less expensive transport for all types of data, and the carriers get to utilize the current surplus of bandwidth, while smoothing out the "burst" demands of data-based communications traffic.

Return to main story, "New VPNs For A Global Economy."

Illustration by Randy Hess

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