Virtual Private Networks A Technology Overview
What is a Virtual Private Network?

A Virtual Private Network (VPN) is a network that uses the Internet or other network service as its Wide Area Network (WAN) backbone. In a VPN, dial-up connections to remote users and leased line or Frame Relay connections to remote sites are replaced by local connections to an Internet service provider (ISP) or other service provider's point of presence (POP). A VPN allows a private intranet to be securely extended across the Internet or other network service, facilitating secure e-commerce and extranet connections with business partners, suppliers and customers.There are three main types of VPN:

These types of VPN are shown in the following diagram (Figure 1). 
All of these VPNs aim to provide the reliability, performance, quality of service, and security of traditional WAN environments using lower cost and more flexible ISP or other service provider connections. VPN technology can also be used within an intranet to provide security or control access to sensitive information, systems or resources. For example, VPN technology may be used to limit access to financial systems to certain users, or to ensure sensitive or confidential information is sent in a secure way. There are many definitions of a VPN. Some of the more common definitions are as follows:

VPNs Based on IP Tunnels
VPNs based on IP tunnels encapsulate a data packet within a normal IP packet for forwarding over an IP-based network. The encapsulated packet does not need to be IP, and could in fact be any protocol such as IPX,AppleTalk, SNA or DECnet. The encapsulated packet does not need to be encrypted and authenticated; however, with most IP based VPNs, especially those running over the public Internet, encryption is used to ensure privacy and authentication to ensure integrity of data. VPNs based on IP tunnels are mainly self deployed; users buy connections from an ISP and install VPN equipment which they configure and manage themselves, relying on the ISP only for the physical connections. VPN services based on IP tunnels are also provided by ISPs, service providers and other carriers. These are usually fully managed services with options such as Service Level Agreements (SLAs) to ensure Quality of Service (QoS). A Ten Point Plan for Building a VPN shows some of the steps taken when deploying an Internet-based VPN.

The following diagram shows an Internet-based VPN that uses secure IP tunnels to connect remote clients and devices (Figure 2). 
VPNs based on IP tunnels provide the following benefits:

The main disadvantage of VPNs based on IP tunnels is that QoS levels may be erratic and are not yet as high as alternative solutions. Also, for VPNs based on the public Internet, higher levels of security such as authentication and data encryption are essential to ensure integrity and security of data. Note that ISP connections used for VPNs do not necessarily need to be protected by a firewall as data is protected through tunneling, encryption, etc. Also, you can use separate ISP connections for general Internet access and VPN access, or you can use a single connection with a common router with a VPN device and firewall in parallel behind it. In some cases, you can use devices that integrate one or more of these functions.

VPNs Based on ISDN, Frame Relay or ATM
VPNs based on ISDN, Frame Relay or ATM connections are very different from VPNs based on IP tunnels. This type of VPN uses public switched data network services and uses ISDN B channels, PVCs, or SVCs to separate traffic from other users. Single or multiple B channels, PVCs, or SVCs may be used between sites with additional features such as backup and bandwidth on demand. Data packets do not need to be IP, nor do they need to be encrypted. Due to more wide-spread awareness about security issues, however, many users now choose to encrypt their data. The following diagram shows a carrier-based VPN that uses ISDN B channels and Frame Relay PVCs to connect remote clients and devices (Figure 3). 
VPNs based on public switched data networks are usually provided by service providers and other carriers, and may or may not provide fully managed services. In most cases, additional services such as QoS options are available. This type of VPN is likely to become particularly popular in Europe, where public switched data networks are widely available and business use of the Internet is less developed. The main benefits of VPNs based on ISDN, Frame Relay or ATM connecstions include the following:

The main disadvantages of this type of VPNs are that ISDN, Frame Relay and ATM services may be expensive and are not as widely available as ISP services. Plus, it is often harder to provide extranet and e-commerce connections to business partners, suppliers and customers.

A Note About the Term "VPN"
The term VPN is used for many different services, including remote access, data, fax, and voice over IP (VoIP). The other sections in this discussion are concerned with just two types of VPN service: remote access and intranet. However, much of the discussion on intranet QoS requirements is relevant to multimedia, including VoIP.

VPN Benefits

VPNs offer considerable cost savings over traditional solutions(Figure 4). 
Find out how much you could save. VPNs cost considerably less than traditional leased line, Frame Relay or other services, because long-distance connections are replaced with local connections to an ISP's point of presence (POP), or local connections to a service provider or carrier network.
Reduced Costs
VPNs offer the network manager a way to reduce the overall operational cost of wide area networking through reduced telecom costs. In the case of a managed VPN service, the savings can be greater as the ISP or service provider manages the WAN equipment, allowing fewer networking staff to manage the security aspects of the VPN. In many cases, implementing a VPN also means that more use is made of an existing dedicated Internet connection.
VPNs based on IP tunnels, particularly Internet-based VPNs, also allow greater flexibility when deploying mobile computing, telecommuting and branch office networking. Many corporations are continuing to experience explosive growth in the demand for these services. VPNs provide a low-cost and secure method of linking these sites into the enterprise network. Due to the ubiquitous nature of ISP services, it is possible to link even the most remote users or branch offices into the network.

The following examples, based on real-life costs, show how you can make significant savings by implementing VPN-based solutions. The first example shows the cost of a dial up VPN service compared to a traditional remote access solution, while the second example shows the cost of an intranet VPN solution compared to a traditional WAN solution. The final example shows the costs of an international VPN service based on an encrypted 128 Kbps Frame Relay connection compared to a 64 Kbps dedicated leased line.

Example 1—Dial VPN Versus Traditional Remote Access
There are two areas where savings can be made with a dial VPN solution compared to a traditional remote access solution:

 According to Forrester's research, the cost savings of an Internet-based dial VPN solution compared to a traditional RAS approach are staggering as shown in the following table (Figure 5). 
However to assess the cost justification completely, we must also consider the potential costs of making the switch to a VPN. A VPN may not make sense if, for example, nearly all of a company's remote users need only make a local call to access the network. This is especially true in the US where local calls are free as there are no monthly usage charges.

In most European countries, however, this is not the case and a remote access solution based on ISDN may actually be cheaper than a dial VPN solution. In many European countries, ISDN tariffs are low, and extensive use of time cutting, protocol spoofing and filtering can dramatically reduce ISDN costs. See Cabletron's ISDN and Telesaving white paper for more details.

Moving to a dial VPN solution means that each remote user requires an ISP account, and the POPs must be local to the majority of the users. The cost benefits might not be as compelling if users are switched to an ISP account with a flat monthly rate but then must
incur long distance call charges to connect to the ISP's nearest POP.

Example 2—Intranet VPN Versus Leased Line and Frame Relay
There are two areas where savings can be made with an intranet VPN solution compared to a traditional WAN solution:

Based on a study by Cabletron, the following table shows the average annual savings per site on the cost of intranet VPN access compared to the cost of traditional leased line access for different types of site. Note that the costs shown in the table are for bandwidth only (Figure 6).

 Based on a cost comparison alone, the reasons for moving to an intranet VPN are compelling. However, a traditional WAN based on leased lines or Frame Relay provides guaranteed levels of Quality of Service (QoS). Replacing a traditional WAN between branch offices and central sites with an intranet VPN is unlikely to give the same levels of performance and QoS to users unless the service provider is able to give throughput and latency guarantees as part of a Service Level Agreement (SLA). See Quality of Service for more information about QoS and SLAs.

Example 3—International VPN Versus International Connections
The savings are particularly evident in the cost of international connections. A 128 Kbps VPN link between London and Tokyo provided by an international ISP costs around $20,000 per year, while a 64-Kbps leased line provided by a traditional carrier can easily cost around $160,000 per year. Even an international VPN service based on Frame Relay provided by a traditional carrier costs around a third of the cost of the 64 Kbps dedicated leased line.

Internet VPNs

VPNs based on the Internet are becoming widely available, especially as an alternative for dial-up remote access. Generally when people talk about VPNs, they implicitly mean an Internet-based network as an alternative to a private network based on public network services such as T1 leased lines or Frame Relay. The Internet has become so ubiquitous and Internet service providers (ISPs) so numerous that it is now possible to obtain connections in all but the most remote locations. Most counties worldwide now have ISPs offering connections to the Internet, although some countries still restrict access. So it is possible for many organizations, both large and small, to consider the Internet not just for external communication with customers, business partners and suppliers, but for internal communications as well using a VPN (Figure 7).

Internet-based VPNs can be used to outsource remote access with significant cost savings and greater flexibility. Modem racks, remote access servers and the other equipment necessary to service the needs of remote and mobile users can be replaced with a managed service provided by an ISP (see Remote Access VPNs).

While Internet VPNs are suitable for remote access needs, there are still problems to overcome before moving to a full intranet VPN solution.Although most VPN products now offer adequate levels of security, the issue of Quality of Service (QoS) and Service Level Agreements (SLAs) remains.While most VPN service providers can offer guarantees for connectivity and uptime, few can offer adequate throughput and latency guarantees. In addition, there are few agreements between ISPs, so unless you can use a single ISP's IP backbone for all your connections, you are likely to suffer service degradation where connections cross boundaries between ISPs. Most users will not want to give up the levels of service currently offered by leased lines, Frame Relay or ATM networks for something inferior. However, in the long term these problems will be overcome, and Internet-based VPNs will become much more widespread for intranet as well as remote access. In a few years, global VPN services based on the Internet will become as cost-effective and as highly available as global Frame Relay and other public network services.

Public Network VPNs

Public networks such as ISDN, Frame Relay and ATM can carry mixed data types including voice, video and data. They can also be used to provide VPN services by using B channels, Permanent Virtual Circuits (PVCs) or Switched Virtual Circuits (SVCs) to separate traffic from other users (Figure 8). 
Optionally, authentication and encryption can be used where the identity of users and the integrity of data needs to be guaranteed. Using PVCs, SVCs or B channels makes it easier to provide additional bandwidth or backup when needed. The traffic shaping capabilities of Frame Relay and ATM can be used to provide different levels of QoS, and because these services are based on usage, there is significant opportunity to reduce telecom costs even further by using bandwidth optimization features.

Frame Relay in particular has become a popular, widespread and relatively low-cost networking technology that is also suitable for VPNs. Running VPNs over a Frame Relay network allows expensive dedicated leased lines to be replaced and makes use of Frame Relay's acknowledged strengths, including bandwidth on demand, support for variable data rates for bursty traffic, and switched as well as permanent virtual circuits for any-to-any connectivity on a per-call basis. Frame Relay's ability to handle bursty traffic and built-in buffering means that it makes optimum use of available bandwidth, something that is important in a VPN environment where latency and performance are concerns. Frame Relay can be used to create a VPN in two ways:
By creating a mesh of Frame Relay connections between sites. These connections are essentially point-to- point links and are similar in concept to dedicated leased lines. Data is kept separate from other Frame Relay users as each connection uses a separate virtual circuit.
By using IP tunnels over Frame Relay connections between sites. As above, these connections are essentially point-to-point links similar in concept to dedicated leased lines and each connection uses a separate virtual circuit. However, several separate IP tunnels can be run over each connection, and each tunnel can be encrypted and authenticated to provide additional security.
Frame Relay is an end-to-end protocol that can be run over a variety of access technologies, such as ISDN, DSL (Digital Subscriber Loop), and even POTS dial-up lines. New access methods such as switched virtual circuits (SVCs), ISDN access and backup mean that Frame Relay is now a much more reliable and cost-effective solution. Frame Relay can also run over, and interoperate with,ATM backbones, making it one of the most widely available public data networking services worldwide. As a result, major service providers and carriers have created global Frame Relay networks which are cost-effective and offer high availability. When coupled with tunneling, encryption and authentication, these attributes make Frame Relay an ideal candidate for global VPN services.

Remote Access VPNs

 Remote access VPNs (Figure 9) are rapidly replacing traditional remote access solutions as they are more flexible and cost less.

Remote access refers to the ability to connect to a network from a distant location. A remote access client system connects to a network access device, such as a network server or access concentrator. When logged in, the client system becomes a host on the network. Typical remote access clients might be:

We can divide remote access connections into two groups: local dial and long-distance dial. For traditional, private, remote access networks, local-area users connect using a variety of telecommunication data services. Remote access long-distance users rarely have a choice other than modem access over telephone networks. The aggregation devices that the clients connect to typically use channelized leased line and primary-rate ISDN, offering dedicated, circuit switched access.

With VPNs, local area users typically have a wider range of data services to choose from, regardless of the support at the enterprise or central site VPN equipment. However, long-distance connections are currently via modem access. What VPN carriers currently offer corporations are "Work Globally, Dial Locally" services. The VPN equipment will use high-speed leased lines to the nearest POP of the chosen VPN carrier and all remote access traffic can be aggregated or routed as IP datagrams over this single link.

Advantages of Remote Access VPNs over Traditional Direct-Dial Remote Access

Disadvantages of Remote Access VPNs

Most of the disadvantages listed here refer to Internet-based VPNs and solutions will be available on VPN-focused carriers. Possible disadvantages of VPN remote access include the following:

Intranet VPNs

Intranet VPNs (Figure 10) can be used to provide cost-effective branch office networking and offer significant cost savings over traditional leased-line solutions. Intranet, or site-to-site,VPNs apply to several categories of sites, from small office/home office (SOHO) sites to branch sites to central and enterprise sites. SOHO sites could be considered as remote access users where dial services are used, but as SOHO sites often have more than one PC, they are really small LAN sites. In an intranet VPN, expensive long distance leased lines are replaced with local ISP connection to the Internet, or secure Frame Relay or ATM connections as shown in the following diagram.
Local ISP connections can be provisioned using many technologies, from dial-up POTS and ISDN for small sites, to leased lines or Frame Relay for larger sites. New emerging "last mile" technologies such as DSL, cable and wireless provide both low-cost and high-speed access. Many ISPs and service providers are now starting to support these emerging technologies for Internet access, particularly for home users and SOHO sites. The intranet market is one where traditional WAN carriers are likely to compete heavily with ISPs.Traditional WAN carriers can offer a VPN service similar to a Frame Relay service with Quality of Service (QoS) based on Committed Information Rate. Traditional WAN carriers are well placed to push their advantage in providing secure, reliable, low-latency, intranet links by adopting their current services to support routed VPN links.

Advantages of Intranet VPN Solutions

Disadvantages of Intranet VPN Solutions

Possible disadvantages of intranet VPN include the following:

VPN Issues

There are a number of issues, both technological and practical, that need to be overcome before you can implement a VPN. Here are some of these issues.
For a VPN to function successfully, it must provide a number of essential features—in particular, features that solve the problems that stem from routing private data across a shared public network. The main features are discussed here.

Since a VPN is a shared-access, routed network, security is the main area of concern. It will require the use of encryption, secure key exchange/re-keying, session and per-packet authentication, security negotiation, private address space confidentiality, complex filtering, and a host of other precautions.

Performance and Quality of Service (QoS)
IP datagrams sent across the VPN carrier service may experience packet loss (silent discards) and packet reordering.
Packet loss tends to be greatly increased by stateful algorithms designed for point-to-point reliable links, for example, PPP compression and encryption algorithms. Throughput may also vary from POP to POP, country to country, and even hour to hour.
Reordering will cause problems for some LAN protocols, for example, when running bridging over a VPN.

Monitoring Actual Throughput
In the absence of Quality of Service guarantees from the VPN carriers, mechanisms are required to allow performance monitoring of tunnels.

Preventing Denial of Service Attacks
Being connected to a public network, the VPN receive-data path can be clogged by unsolicited data to such an extent that no useful business can be achieved. Unlike a private leased line, traffic that is not from the peer remote site (tunnel end-point) can flood down the receive path of a VPN tunnel from anywhere on the public network. For client-based tunnels, there are no services currently.
In the case where the VPN carrier is providing the tunnel, the VPN carrier could offer to filter non-VPN traffic, or perhaps provide a bandwidth reservation service. For the L2TP VPN carrier-based approach, the client is protected by the fact that it is not reachable via the public network, as no global address is assigned

The term scalability refers to how well a system can adapt to increased demands. A scalable network system is one that can start with just a few nodes but can easily expand to thousands of nodes. Scalability can be a very important feature because it means that you can invest in a system with confidence that you won't outgrow it. If VPN carriers are to succeed in VPN deployment, the technologies they use need to scale easily. The VPN customer will also require this at larger Security Gateway sites. Enterprises will need to consider:

Client-based software should be as transparent as possible. VPN carriers will require new management tools in order to simplify the configuration and monitoring of a corporate customer's VPN. Also,VPN customers may well want a privileged management window into their VPN carrier-held database to make changes for themselves!

To offer a "go anywhere"VPN service,VPN carriers are keen to provide a service that can support all protocols and all data links (e.g. PPP over anything).

Telesaving means making cost-effective use of WAN data services. Telesaving is appropriate to all WAN links, but is particularly useful for "pay-as-you-use" data services, for example, ISDN. For clients using this type of service to access the VPN carrier network—and from there, a tunnel server—telesaving needs to be performed from a central site (an Enterprise Security Gateway) for data links that are connected indirectly via the VPN carrier network.
New, VPN-specific, telesaving features will be needed to take advantage of the possibility of cheap bandwidth via a VPN link, while maintaining some layer of service using more expensive, private data links when needed.

Bandwidth Reservation and Quality of Service (QoS)
Bandwidth reservation and Quality of Service (QoS) refers to the ability to "reserve" transmission bandwidth on a network connection for particular classes of traffic or particular users. It allocates percentages of total connection bandwidth for specified traffic classes or users, which have given priority levels assigned to them. A bandwidth reservation algorithm is used to decide which packets to drop when there is too much network traffic for the available bandwidth.
Given a fixed capacity VPN WAN link (say a T1), it is desirable to reserve bandwidth outbound (and inbound if possible) on a per user (remote access) or per remote LAN basis.There are, however, some questions about how bandwidth reservation can be accomplished over tunnels. For outbound reservation, the Security Gateway could implement transmit priority queues, but inbound reservation requires the assistance of the VPN carrier.

Some possibilities for inbound reservation are:

It would be useful if bandwidth reservation could be managed dynamically.

High-Performance Routing Issues
With encryption being used from intranet or host-to-host, the nature of IP-switching filters changes. For IP-switching (L3 switching) to function on encrypted data flows, it may need to understand the IPSec and L2TP standards. For example, the definition of a flow may need to make use of the IPSec protocol headers to identify a communication stream. As an example, it may be possible to trigger on the SPI field of the ESP header used in IPSec as a means of identifying a stream. For L3 switches that terminate secure tunnels, no fast forwarding is possible since the encrypted IP packet needs to be reconstituted before being forwarded. There is also the extra load of decrypting/encrypting for these secure tunnels. In time,encryption (and compression) will be present in all hosts and there will be less need for routers to terminate secure tunnels-allowing switching based on tunnel header information and requiring no encryption/decryption horsepower. Work to redefine the TOS field of IP packets as part of DiffServ may deliver the means to reinstate traffic prioritization in L3 switches for secure data flows.

Quality of Service

What Quality of Service can you expect from your VPN service provider and how can you measure what you are getting? Most data services, such as Frame Relay, provide guarantees for uptime and availability, as well as throughput and response time. These guarantees, or Quality of Service (QoS) metrics, are defined in the Service Level Agreement (SLA) with your service provider.
While most managed VPN services provide a certain level of guaranteed uptime and availability, many do not provide comparable performance and latency guarantees, nor do they offer throughput guarantees. There are several different schemes used to provide Quality of Service, some of which have been developed specifically with a particular technology or protocol in mind, such as Ethernet or ATM. Other schemes are specific to the IP protocol and are being developed by the IETF. Examples of different QoS schemes are:

If you are considering a managed VPN service, you need to pay particular attention to the QoS metrics specified in the SLA from your service provider. If the service provider is unable to provide adequate SLA guarantees, you may need to reconsider how you deploy VPNs in your environment. Some applications, such as dial-up remote access, are very suited to the VPN approach as users are unaccustomed to guaranteed uptime and availability and are less demanding of the service. However, replacing dedicated leased line or Frame Relay connections between branch offices and central sites with an intranet VPN is unlikely to give the same levels of performance and QoS to users unless the service provider is able to give throughput and latency guarantees.

SLA Checklist
Here are some things to ask your service provider about SLAs:

SLAs In the Future
Over the long term, SLAs for VPN services are likely to improve as the various different QoS schemes are deployed more widely. However, until this time, SLAs may be limited to connections over a single service provider's network. To ensure end-to-end SLAs in the interim time, traffic should stay on the same network. If the connection goes across networks, a service provider has little control over the quality of the other provider's network. This situation is likely to remain until service providers reach agreement on SLA interworking.

VPN Futures

VPNs are only just starting to be deployed. Once VPNs are in wide use, they provide the opportunity to integrate other types of communication such as multimedia and Voice over IP (VoIP).

The primary concern for VPNs will always be security. However, once VPN products are widely available, the focus will fall more and more on delivering quality of service (QoS) and class of service (CoS) over IP networks as part of a VPN. As voice and data services merge into one (voice over IP, IP fax), new network services are being developed to offer the QoS/CoS required for data, telephony and fax. (For more information about QoS see Quality of Service and SLAs.) As products develop to take advantage of this opportunity, all communication devices will become IP addressable, providing voice, fax, video and data to the desktop.All of these services can make use of VPN security protocols.

Name servers could become very useful for configuring and reconfiguring VPNs. If the routers in a complex intranet VPN network were to make use of name servers to locate peer routers, then these networks could be reconfigured simply by changing the name-to-address mapping. Work is in progress to extend the use of DNS servers to provide a secure (IP Security-based) mechanism for routers to find peer routers and clients to find servers.

Next Generation VPN Carriers
New VPN carriers are emerging to take advantage of the new markets, and traditional telecommunications providers see that the aggregation possible with routed networks makes good sense for remote access data, as it reduces the strain on long-haul dial services as well.

New 'last-mile' technologies like Digital Subscriber Loop (DSL) deliver a means for the phone companies to provide high bandwidth IP access over existing cabling (twisted-pair copper). Cable companies also offer the potential to deliver high bandwidth IP access over existing and new cable infrastructure. As the phone and cable companies become familiar with delivering IP services, these new last-mile technologies put them in a good position to acquire a significant share of the Internet access and VPN markets.

New providers are focussing on providing VPN services. A popular technique is to build an ATM or Frame Relay backbone and then offer VPN links with guarantees on throughput and latency to enable customers to outsource remote access, site-to-site and even interoffice fax and voice.These networks are well placed to offer everything from voice to site-to-site by making use of the quality of service options inherent in ATM and Frame Relay networks.

To offer global services to a VPN customer with global data needs, consortiums of VPN carriers are forming to offer a uniform service internationally. Many of these services are based on ATM and Frame Relay, although new IP based services are becoming available.

VPNs and Voice/Data Convergence
 Companies today use different communications infrastructure to provide their voice, data and Internet connectivity needs. On the voice side, components include a PABX, key system or Centrex service with features such as voice mail and automated attendant. Computer Telephony Integration (CTI) applications may also be used to link voice capabilities with data applications (Figure 11). 
On the data side, LAN infrastructure is typically provided by a stackable or chassis based hub with multiple 10/100 Ethernet segments. WAN connectivity is typically provided by a router using leased lines or Frame Relay, with Internet connections for e-mail and web browsing provided via a separate firewall connection.

Companies that use a variety of data and voice services to meet their communication needs will find new alternatives becoming available that offer direct and indirect cost savings. New customer-premises routers are now appearing that act as both Security Gateways and Multimedia Gateways. These Multiservice Routers integrate a number of LAN and WAN capabilities such as hub and routing functions, and also support new applications such as Voice Over IP (VoIP), IP-fax, Internet access (browsing, publishing, e-mail, e-commerce) as well as VPN traffic over a single local-loop link to a service provider POP.
(Figure 12)
An initial investment in web access and web publishing may well be the starting point for a company that wishes to take advantage of VPN services. For the move from web publishing and e-mail to full e-commerce, companies may follow these steps: 


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