Networking giant Alcatel-Lucent has taken the wraps off its new virtual private network (VPN) service, which aims to help service providers offer assured quality and performance for enterprise applications.

Most application-based VPN systems require hardware to be installed at every enterprise location, which can be expensive and does not scale very well. Similarly, the growth of cloud-based applications makes implementing these VPNs very tricky as it can be difficult to discern which traffic belongs to which application without the introduction of laborious deep packet inspection.

Alcatel-Lucent's new Application-Assured VPN promises to address these issues using a cloud-based model, allowing service providers to offer enterprises the option of monitoring network traffic at an application level via a dedicated web portal.

Enterprises can also use the portal to manage application prioritisation and bandwidth optimisation, enabling significant improvements in network planning, usage and application performance, according to the vendor.

"We continue to work closely with our customers to help them maximise the return on their network, and strategically expand their service offerings into areas that provide new kinds of value-added revenue opportunities," said Basil Alwan, president of IP activities at Alcatel-Lucent.

"These new capabilities will enhance customers' existing VPN portfolios, allowing them to expand their addressable market with higher value services."

To make use of the application assured VPN system, service providers already using Alcatel-Lucent service routers need only to install a new 'services card', and reporting and analysis software. According to Alcatel-Lucent, this model provides the vital economies of scale lacking in most other VPN implementations.

Once installed, the user can then begin to monitor and control their network applications, which is vital for the effective implementation of bandwidth heavy applications such as VoIP and video, as well as business critical data applications such as SAP, Citrix, email and instant messaging.

Recent research by analyst firm Ovum predicts that the IP VPN and Ethernet VPN services market will generate revenues of over $45bn (£29bn) by 2012. Alcatel-Lucent said that this new platform will help service providers offer the crucial element of predictable performance.

"There has been a lot of interest from service providers in providing these 'application-aware' services," said Peter Hall, principal analyst at Ovum.

"The Alcatel-Lucent solution addresses this interest, but in a somewhat different way in that the capabilities are in the network. So it is potentially lower cost to end users, more highly scalable, and easier to provide for service providers."