Virtual Private Networks: Enter the VPN Solution

The transition of today’s networks is very preeminent: from circuit-switched networks that were designed for voice to packet-switched networks to integrate voice, video, and data.

Undoubtedly, the next-generation network infrastructure would be dominated by Internet Protocol (IP), which would enable convergence of all higher-layer protocols and applications onto a common platform. And IP networking is going to have a deep impact on all sections of the industry–the equipment makers, the carriers, and the enterprise customers. With Virtual Private Networks (VPNs), it would result in a sea change in the way companies share and process their information internally and externally, blurring the divide between inter- and intra-corporate communications. Virtual-enterprises are no more a remote possibility now.

While on one hand, enterprise-business strategy to have VPN services is on the rise, on the other, several carriers as well as network-services companies are positioning themselves to service and develop this market. 

Opportunity for Public Data Services



It is clear now that Internet will play an unambiguous role in shaping the entire
consumer/vendor relationship in all major industries. Business models are being recast to abide by/or forge a new digital economy. The paradigm shift is towards how companies can manage the flow of data (soon voice and video too would get incorporated) within and between organizations using flexible networks. They want to do business virtually, using secure remotely accessed applications, intranets, and extranets. And IP is evolving as an alternative to building closed networks that were based on proprietary specifications for a variety of applications and situations. Companies are increasingly feeling comfortable leasing IP-based services, rather than owning them outright. This is to cope with the ever-changing technology accommodation and also costs. A Srinivas Gopalan, senior vice president, Satyam Infoway Ltd, aggregates it as, “By creating a VPN–a public data network–it is not only possible to offer networking facility, but also have value-added service offerings like workflow automation, replicating databases, and running of intranets and extranets too.” 

What is a VPN? Several industry players find it very difficult to define this buzzword because of the changing nature of traffic and requirements. Earlier, it was associated with voice services, but today it is the data services. In a nutshell, they say it is a private WAN, using IP facilities including Internet or private IP backbones. The earlier such networks were on Frame Relay and ATM, where routers, firewalls and other Central Processing Equipment (CPE) types were attached to the physical and bandwidth pipes provided by carriers. These were the real private networks. But now Internet cloud, instead of the Frame Relay or the ATM cloud, offers the same security, reliability, and features formerly available only in private networks over the public networks. And at lower costs. 

The wave of VPNs has extended to IP networks that have a mix of leased, dial-up, and dedicated circuits, which facilitate any-to-any connectivity. That is being

communication-technology independent and connecting the components and resources of one network over another network.  Business Advantage



If there had not been any business advantages, then over 70 percent of the companies in the US would not have been moving away from the private networks to VPNs. It would be interesting to note that about 61 percent of Fortune 1000 companies, according to Forrester Research, are looking at VPNs for business-to-business extranet links. The growth of VPNs is no more alarming. Cahners In-Stat Group, a high-tech market research firm, recently published a report on VPNs, according to which the Internet VPN market is expected to reach more than $2.67 billion in 1999, and more than $32 billion in 2003. The strong growth is based on the value proposition VPNs are offering to businesses and service providers, in addition to the growing demand to provide efficient communications between teleworkers, branch offices, and partners. Says Shannon Pleasant, senior analyst with Cahners In-Stat Group, “The development of e-commerce and supply chain integration in addition to the need for LAN-to-LAN connections to enable sharing of critical resources between branch offices will drive VPN deployments.” According to the report, the major drivers for VPNs are as mentioned under.

• E-commerce is expected to emerge as a major application enabled by VPNs, as VPNs move from in-house deployments to network-based VPNs deployed through the service provider in mid-2000. 
• SDSL services to small businesses in the US are expected to reach over half-a-million subscribers by the end of 2000. All will be candidates for
  
  DSL-based VPNs. 
• Voice over VPNs is the next step in converged communications. 

In India, the concept is just beginning to catch up. This is so because it is only now that the companies, big and small, are beginning to realize that concentrating on core business activities, outsourcing IT processing as much as possible, is a business advantage. And what is central to VPN is outsourcing. Actually, setting up a network is cheaper and reliable is a misnomer. What one needs to look into is the Total Cost of Ownership (TCO). And VPNs are proving to help companies to attenuate the time and distance parables in the business cycles.

The telecom carriers, with the necessary infrastructure, resources, and expertise, are enabling economies of scale to support business-class VPN services. 

What are the benefits? In the Indian context, companies going for redundancy can bypass the DoT relationship,

hire the services of a network specialist, stay free on network management, 



and the most important of all–build redundancy. Building redundancy
would mean simple things as replicating databases across all the connected branches to more complicated things like running Intranets and extranets. In all rights, VPNs will prove to be a low-cost infrastructure for global communications.  What do Companies Look Forward to?




The objective is to provide reliable and scalable remote access solution to the employees giving them connectivity to corporate computing resources
regardless of their location. Corporations used to typically choose the MIS department driven solution, where an internal information systems department is charged with buying, installing, and maintaining corporate modem pools and a private network infrastructure. Or, the other route was to go for Value-Added Network (VAN) solutions, where they pay an outsourced company to buy, install, and maintain modem pools and a telco infrastructure. But now there is a middle path between the two, where corporates can either supplement or replace their existing pool of modems and network infrastructure with less expensive Internet VPN solution.

The common uses of VPN are for remote-user access over Internet, connecting networks over Internet, and connecting computers over an intranet.

Remote User Access over Internet



This is nothing but using a VPN to connect a remote client to a private
LAN. What happens in this system (see figure 1) is that a user with VPN software client makes a local connection to an ISP, whereby this software creates the virtual private network between the dial-up user and the corporate VPN server across the Internet.

Connecting Networks over Internet



This is a method (see figure 2) of using dial-up line or dedicated lines to connect a branch office to a
corporate LAN i.e., to give connectivity to remote sites. In the first case (dial-up line), what happens

is that the VPN software can create a VPN between the branch office router and the corporate hub router across the hub using the connection to ISP. In the second case (the dedicated line), rather than having a leased-line connectivity between the corporate hub and the branch office directly, one can go for the local dedicated circuits and connect to the ISP.

Connecting Computers over an Intranet 



If the data is sensitive and needs to have restricted access, then VPNs can do that allowing the LAN to be physically connected to the
corporate intranet and separated by a VPN server 



(see figure 3). The network administrator can create a path by which the users on the corporate inter-network who have the appropriate credentials can establish a VPN with the VPN server and gain access to the protected resources.  Why VPN Services?




VPN services will become a new status quo if they address reliability, capacity, scalability, reach, and interoperability issues.

Reliability



Today, the IP VPNs have to interface with more communications and computing elements than ever before i.e., it has to integrate remote dial, LANs and WANs, desktops and MIS applications, intranets and extranets, web sites, and application-hosting environments. In such a situation, making various elements interoperable smoothly, maintaining each element’s integrity and independence becomes important. And the requirement of the corporates is that the VPN infrastructure not only be plug-and-play, but also be crash proof. A full-service carrier that has the resources to prepare and implement contingency plans in the unlikely disaster strikes will make a difference to the down times. 

Capacity, Scalability, and Reach



With corporates looking to go global, the VPN need to be global and the network activity increases exponentially with the number of end-users connected. Bandwidth becomes an issue. Global networks attracting more traffic to fill capacity will be the order of the day. The traffic also tends to surge at different times in different places. So such traffic patterns need to be addressed with supporting technologies. Another factor that is important is that dedicated high-bandwidth connectivity between heavy traffic locations and around major cities or offshore sites in different countries will require dial-up IP connectivity throughout individual countries. 

Interoperability 



A high-level of interoperability is a prerequisite for network-to-application and
application-to-application communication when everyone is looking for an end-to-end solution. While network-to-application interoperability would allow customers access a host company’s Intranet application over Internet to electronically service themselves in real-time, application-to-application interoperability lets members of an automated supply chain exchange data via an extranet between different legacy applications and message queuing software. The demand is to increasingly interwork heterogeneous environments and integrate the diverse applications, along with managing the complexities. 

IP services may be at the infancy stage, but every one says that they would surpass all others in the long term. Many service providers are looking to provide local access facilities in addition to long distance network services. VPN is being seen as an option offering a series of permissions for different layers of

access in a secure manner, leveraging the presence of the most cost-efficient network–the Internet. These are being designed to support applications and 



activities that were previously done by proprietary dedicated networks. The immediate beneficiaries of this technology today are the mid-size companies. And the most exciting areas being opened up by this technology is application-to-application connectivity.