The global market for virtual private networks (VPNs) is expected to hit $29 billion within four years as organisations use the technology to replace traditional wide area networks (Wans).
VPN services originated in the traditional telecomms carrier world where customers could lease portions of telcos? lines for high prices. The trend now, however, is to use the lower cost Internet as a transport mechanism and have Internet Service Providers (ISPs) add value to ensure network reliability and security. These services are called managed VPNs.
According to recent figures from analysts, Infonetics Research, managed VPN services will account for 65 per cent of the total VPN services market by 2003, while revenue for VPN security services will reach $5.3 billion in the same timeframe.
Richard Kagan, vice president of marketing at VPN specialists, VPNet, which has released a White Paper on the technology, said managed VPNs were the next step on from traditional leased lines and frame relay services.
"It was a significant shift [when carriers moved] from leased lines to frame relay. VPN is the next wave for linking intranets together, for establishing extranets, and for remote access," he said.
VPNet claimed that AFC, a US restaurant chain, shaved 98 per cent off the cost of communicating with its 2,500 national franchisees using the technology. It had originally used VPN services based on IBM?s private network.
However, Kagan warned that significant expertise was needed to introduce VPNs because network administrators needed to deal with new issues such as bandwidth management. VPNs also encouraged users to communicate globally, which they often had not done before, he said.
But VPNs cover three main areas, according to the White Paper - security, managability and quality of service.
Various Internet Protocol Security (IPSec) standards are attempting to address public network security, particularly in relation to the Internet, while specialist vendors are coming out with monitoring and troubleshooting tools to deal with managability issues.
Users could also gain quality of service guarantees from service providers that are prepared to set aside portions of their network for use by businesses.
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