The Advantages of a VPN

Using the Internet to distribute network services over long distances means companies no longer have to purchase expensive leased lines to branch or partners' offices as a VPN connection needs only to use a relatively short dedicated connection. In an organization experiencing rapid growth, this can make a enormous difference in costs. As an organization adds companies to its network, the number of leased lines required climbs with it exponentially. In a traditional WAN, this can limit the flexibility for growth, whereas VPNs avoid this problem by tapping into an almost universally available network.

VPNs can further reduce costs by lessening the need for long-distance telephone charges, as clients can gain access by dialing into the nearest service provider's access point. While in some cases this may entail making a long-distance call or using an 800 service, a local call is usually sufficient. This can dramatically cut telecommunications costs for enterprises with many international sites, sometimes in the range of thousands of dollars per person, each month.

A third, more subtle way that VPNs may result in lower expenditures, is through reducing the company's support burden. With a VPN, the service provider must support dial-up access, instead of the organization using it. Theoretically, a public service provider can charge much less for support, because its cost is shared among a wider customer base.

Finally, VPNs save a company on operational costs for equipment previously used to support remote users. A company using a VPN can get rid of its modem pools, remote-access servers, and other WAN equipment and simply use its existing Internet installation. Many companies employ several links with different functions prior to setting up a VPN.

Companies enjoy the flexibility that comes with VPNs, since they typically do not require long-term contracts, as is the case with most data services. This allows companies to easily switch over to a lower-priced service if they so desire. Companies can usually get a high-speed Internet connection established and configured in a much shorter time than it takes to get a similar data service. In some foreign countries, it can take as long as a year to get a leased line installed. For some industries, such as construction or insurance, this can make a crucial difference in a company's operations and financial health.

VPN technologies are also considered remarkably secure. Since the introduction of IPSec, VPN data protection has become more standardized among service providers. Data that is sent over VPNs is confidential, requiring authorization to be received or replayed. Users can authenticate packets to establish the validity of the information, and the integrity of the data is usually guaranteed.

Companies may also choose to build an extranet application on a VPN, in order to use its access controls and authentication services to deny or grant access to specific information for customers, trading partners or business associates. This can help build customer loyalty, as clients who are given higher levels of access would be less likely to switch to another business partner. The same technology can also be used internally to assign worker populations to segmented groups with different access levels. This solution is simpler and more economical than traditional methods used by IT managers.

A VPN-based extranet may replace a more expensive system, such as an electronic data interchange (EDI), which typically necessitate custom software and the use of a value-added network (VAN) provider. Some VANs charge upwards of $6 to $12 (US) per hour of connectivity, much more than ordinary service providers.

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