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Virtual Private Networks
by
Companies and organizations with international operations often rely on a patchwork of long-distance phone service, dial-up modem connections, wide area networks (WANs), and leased lines from multiple communications service providers to keep their people in different countries talking. Managing such systems can be a major headache, and the bigger their international operations, the larger the potential problems.
Telecommunications carriers have risen to this challenge by offering a service known as virtual private networks. VPNs give multinationals a one-stop-shop way to outsource their voice-data-video communications needs to expert third-party vendors who then deal with the headaches of knitting hardware and software that may be located in 50 countries around the globe into one, smoothly-functioning (the buzzword is seamless) network.
VPNs are private communications networks built on public or shared infrastructure. In computer communications terms, a virtual network is a logical rather than physical one. Private refers to the need for technology such as firewalls and data encryption to safeguard sensitive information.
VPNs enable users to enjoy all the advantages of secure, private, voice and data communications without the expense and difficulty of building and maintaining their own communications networks made up of cables, servers, routers, and switches located all over the country -- or the world. And employees in New York can communicate as easily with colleagues in Singapore as with their co-workers on the next floor.
PerfectSite Corporation, based in Sterling, Virginia, is an international communications consulting firm. According to Patrick Lisk, the firm's director of technology, "VPNs were predominantly designed to allow organizations to extend their operations anywhere around the world. The technology enables them to connect over shared or public networks such as the Internet with the same security that they would enjoy on a local area network (LAN)."
A Big Business, Getting Bigger
Major telecom carriers that offer VPN service include Global One, AT&T Global Network Services, Equant, Infonet, and Fiberlink Communications. Some of these companies, like Equant and Infonet, are facilities-based, meaning that they own nodes and switches in locations all over the world which they use to route and consolidate customer voice and data traffic.
Other VPN providers, like Fiberlink Communications don't own their own hardware. Instead, these companies are basically providing management of customer communications through partnerships with other service providers in countries all around the world.
Global One (based in France) is currently developing a $30 million VPN that will link the 15 member countries of the European Union. The virtual network consists of a high-capacity fiberoptic backbone to which each country will then connect through its own national telecom company. What this tree-and-branch structure means is that each country's EU agency needs only a single high-capacity connection to send secure voice and data communications to all the other agencies -- as opposed to a spiderweb configuration of 14 separate connections.
Increasing numbers of carriers are offering global VPN services. Although still relatively small today, the industry is expected to explode over the next few years. Market research firm The Yankee Group has forecast that revenues from virtual private networking services will grow from $90 million this year to $531 million by 2005. This will largely be fueled by the growth of the Internet, which is stretching its wired (and wireless) tentacles out over more of the world.
The Internet Changes the Rules
The Internet is a global network of networks, all joined together at (literally) countless points. This any-to-any connectivity makes the Internet an easy and inexpensive foundation for virtual networking. Each site needs only one link to the VPN in order to communicate with all other sites. By comparison, other types of VPNs requires that client companies identify and configure in advance all the specific locations they want to be part of the communications network. This increases administration and management costs.
"The foundation for many types of VPNs is Internet Protocol, or IP," observes PerfectSite's Lisk. "The Internet has changed the way companies share and process their information, both internally and externally."
On the plus side, the Internet represents a flexible and cost-effective alternative to other types of VPNs. But, from the standpoint of business or government communications, the downside of IP-based virtual private is security and reliability. Users are sometimes reluctant to entrust mission-critical data to them because it is difficult to guarantee security and quality-of-service when traffic is moving between servers at networking transfer points all over the globe. By the same token, IP communications can introduce delays (known as latencies) of up to half a second into transmitted data, and this isn't acceptable for many applications.
There are also variations in the reliability of Internet service around the world. It's excellent in North America and good in Western Europe. But in other parts of the world, the reliability of IP-based communications drops off rapidly, below the magic threshold of 90% availability that most business users consider the lower limit of acceptability. (By contrast, the rule of thumb for quality-of-service reliability at the old Ma Bell, and major North American telecom companies today, is the famous "five nines" -- meaning that service must be available to the customer 99.999% of the time.)
For these reasons, many multinational corporations and entities use IP-based VPNs primarily for e-mail. More sensitive, valuable, electronic communications are often entrusted instead to more expensive VPN systems based on mature data technologies such as frame relay and ATM (Asynchronous Transfer Mode).
Future Directions
Responding to these customer concerns, the big global VPN players are reinforcing their international networks by leasing bandwidth (i.e., information carrying capacity) on transoceanic cables. This helps insure that priority data will be able to get through even when Internet traffic is heavy.
And a new technology called Multiprotocol Label Switching also holds promise for moving high-bandwidth data such as streaming video across public and private networks with high quality-of-service. Currently being developed by the Internet Engineering Task Force (the global body that sets technical standards by which the worldwide network of networks operates), MPLS moves streams of data packets on predetermined routes over the Internet. The effect is almost like creating private tunnels or HOV commuter lanes for high-priority traffic through the controlled chaos which is the Internet.
Brooke Stauffer is president of Claritas Communications, a technology consulting firm with a practice emphasizing voice-data-video networking and advanced home systems. He has previously occupied top technical posts at the National Electrical Contractors Association (NECA), Association of Home Appliance Manufacturers (AHAM), and the early high-tech startup SMART HOUSE, L.P. Brooke Stauffer writes and lectures widely and is the author of four books including "Smart HOuse Wiring" (International Thompson Publishing). Reach Brooke Stauffer at (301) 215-5421 or brooke@necanet.org.
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