Convergence: lower costs and extra flexibility - the IP VPN promise

The answer to your networking needs?

Heavy-duty applications from the likes of Oracle, SAP and Siebel, not to mention run-of-the-mill email, are putting a strain on wide area networks. Is it any wonder, asks Stewart Baines, that network managers are increasingly turning to IP virtual private networks? While cost management initiatives continue to dominate corporate IT spend, IP VPNs are increasingly becoming the most important strategic wide area connectivity priority for businesses small and large. That IP VPNs can lower operational costs - along a demonstrable ROI curve - but can also add a great deal of extra flexibility into the way a business works, is a double whammy for IT buyers eager to shine. IP VPNs are becoming must-haves on many strategic IT reviews because they can help businesses deal with changing working patterns like teleworking, while supporting widely distributed applications and data repositories and extending the enterprise to their customers and suppliers alike. "All new RFPs from Fortune 500 companies say they want to move from a Frame Relay WAN to an IP VPN. They're already up with the technology's potential and know what they want," says William Priest, professional services director at Equant. In fact, it's not inaccurate to describe IP VPNs as the next big thing in the WAN, even if they have been a long time coming. But what's the business case? IP VPNs come in three basic flavours and use either the public internet or a private IP network as their WAN link. IP VPNs secured by technologies like Secure Sockets Layer (SSL) and IPSec are designed to provide cost-effective virtual networks that are tunnelled across the public internet. IP VPNs supported by the Multi Protocol Label Switching (MPLS) quality of service standard offer a premium virtual network service over a private IP network. All are generally considered to be more cost effective than the permanent leased lines that are the WAN link of choice at the moment. But of course that's all changing. According to Frost & Sullivan, the lower barriers to entry of public internet-based IP VPNs, secured by technologies like Secure Sockets Layer (SSL) and IPSec, mean that revenues for service providers will continue to march on despite tough trading conditions. But more importantly, it also means small and medium-sized enterprises (SMEs) looking to support an increasingly flexible workforce have a justifiable buy-in opportunity. The public internet is seen as the ideal transport network for this as long as the service level is understood to be 'best effort'. This area is typically dominated by the DIY IPSec VPNs but is increasingly being challenged by SSL VPNs that use basic browser technology. SSL VPNs mean clientless access - nothing has to be installed in the end user terminal, all that is needed is a browser. An SSL session can therefore be set up from a PC anywhere, much more cheaply then an IPSec IP VPN, in a hotel room, an internet café or from a wireless hotspot. IPSec VPNs, more suited to site-to-site data transfer using extranets and intranets, are authenticated and decrypted by customer premises equipment (CPE) at either end of the transaction. Neither of these two types of public internet-based IP VPNs is likely to ease network management as they are not usually offered as a managed service but they do offer the cost savings SMEs are hungry for. A further plus point is that remote working is firmly on the government's agenda – the recent Mobile Working Directive encourages organisations to provide teleworking facilities for parents, for instance. According to the Social Market Foundation, remote working can increase employee productivity by 30 per cent. Naturally, lowered overheads is the main reason why businesses want to encourage their employees to work from home. When Avaya implemented an IP VPN and remote access policy for all its UK workers, it estimated that it saved around £4,000 a year per person in the process. On the downside, setting up remote access services by configuring laptops and managing security protocols can be an onerous task, particularly for workers who only telework on occasion. But public internet-based IP VPNs are proving considerably cheaper than traditional RAS set-ups. So do the remote access market arguments for SSL and IPSec IP VPNs stand up in the MPLS IP VPN world? Again, a good reason why MPLS IP VPNs are increasing in popularity is that they offer a tangible ROI, ideally within two years. A recent survey by analyst house Gartner Group found the average ROI on an IP VPN was 55 per cent in the first year, and 100 per cent within 18 months. "A return on investment is absolutely critical in the current economic climate," says David Critchley, UK business development manager, Cisco Systems. "And if you can demonstrate increased productivity, it will help considerably." For multinationals, moving from international Frame Relay circuits to an MPLS IP VPN does not necessarily save money in the short term though longer-term financial payoffs are already being reported by early adopters. Another key driver, claims Equant's Priest, is the almost complete domination of Oracle, SAP and Siebel in multinationals, many of which are stepping up to a global implementation. This, among other vertical industry applications, requires a WAN of much higher reliability and predictability than can be had from renting a pure pipe. Another benefit here is the ability to monitor and prioritise traffic on an MPLS IP VPN. Over 60 per cent of intranet traffic tends to be email, web browsing and instant messaging, a great deal of which will not be on company business. Pure pipe WAN links have not been able to differentiate between these activities – business or personal. Mission critical applications like Oracle or SAP need to be prioritised at the expense of web browsing, and this plays to MPLS' strong suit. "You're unlikely to change people's habits and you can't just keep adding more bandwidth. You need to prioritise traffic and if that means delaying email, so be it," argues Priest. The MPLS VPN is the foundation for the next step of convergence – migrating voice traffic to the data network, rapidly speeding up the ROI time, often to full payback within a year. In most cases, and with all flavours of IP VPN, although the key benefits of adopting an IP VPN strategy are cost reduction and flexibility, its actual driver is change. A decision to adopt an IP VPN strategy is more likely to support a change in the way a business works and will be made during an inflection point in its strategy. For example, Yorkshire Building Society took the MPLS step with Cable and Wireless. It was running four different networks – one for site-to-site connectivity, one for Internet access, one for remote workers and one for telephony. "We were reaching our capacity. Our IP network was not flexible enough for what we wanted to do. It couldn't respond to our changing requirements. We wanted to converge all four networks into one," explains Berni Wells, IT manager for the building society. Not only were network management and more cost effective bandwidth the key criteria, so was the ability to try new ways of working. The building society now wants to trial e-learning, video conferencing and instant messaging - all not possible previously. Setting up a converged network was a decision based as much on what applications they wanted to use as on the cost cutting potential. Next time: What IP VPNs are good for...