Convergence chasm: VPNs bring vendors into new realm of opportunity

Virtual private networks are invading the private networking market. Enterprise customers know how valuable partitioning the network can be, and now VPNs are catching the eyes of service providers. Manufacturers from both sides of the fence are pushing their way into the other's market.

Cisco Systems is probably the best known of these crossover vendors, and Nortel Networks, having acquired Bay Networks, is another key player. Compatible Systems, a small internetworking vendor that originally sold routers in the enterprise market, is also moving up the network ladder. Compatible Systems proceeded into the VPN arena a couple of years ago and recently launched two VPN switch product lines: one for the enterprise and another for carriers.

At the same time, Newbridge Networks, known for its carrier-class switches, is targeting the enterprise. The lines between private and public networks are blurring, and this spells opportunity for vendors and carriers.

Compatible Systems' IntraPort Carrier Class VPN switches grew out of the enterprise but are geared for service providers. Positioned as a Layer 2 or Layer 3 gateway, the two- and eight-slot devices allow dial-up remote access to frame relay and multiprotocol label switching intranets via IPSec. Each slot supports up to 5000 VPN connections.

"We got dragged into providing this gateway product because some of [our carrier] customers looked at entering the VPN side," said Matt McConnell, president of Compatible. "We had a box and a technology set that was nearly ideal for what these [carriers] want to do. They want the ability to use their [points of presence] to carry IPSec traffic to those gateway boxes."

The VPN service can be sold to the service provider's existing customer base, he said. "These service providers are selling two separate services-Layer 2 branch office connectivity and Layer 3 [Internet service provider] dial-in service-[but] there is no way to make the link between the two. If they can make that link, they can charge for it," he said. The IntraPort will fuse the two services.

Although Compatible is moving into the carrier market, its bread and butter is still the enterprise.

The reverse is true for Newbridge, which has a strong carrier presence but keeps a watchful eye on the enterprise, said Stu Aaron, associate vice president of marketing for Newbridge's internetworking product group. In the end, the goal is to meet the enterprise customer needs. "The enterprise is the end customer," Aaron said. "Service providers are using our product to sell solutions to enterprises."

Newbridge's Versatile-IP strategy is designed for service providers and large enterprise customers, which Aaron dubs "enterprise service providers." Unlike an outsourced service provider, enterprise service providers have many departments or "customers" within one company.

V-IP is based on creating a "virtual router" instead of a tunnel-based VPN, Aaron said. The V-IP architecture incorporates service points at the edge of the network or department; a switching fabric, which routes users through their virtual networks within an IP, ATM or frame relay cloud; and service management.

Because tunnel-based VPNs are not predictable, reliable or secure, Aaron argued, "enterprises are unwilling to use service providers or VPNs for mission-critical business applications today."

The V-IP architecture "delivers those attributes, [and] the same solution will scale down to meet enterprise customers that want to do that themselves."

Which route will be easier: moving from the enterprise to carrier market or vice versa? John Morency, vice president of network solutions at Renaissance Worldwide, said it's easier to move from a carrier-class background into the private network market. "In general, you can probably scale down that technology to meet the needs of enterprise customers. It's not so much a function of technology, but of vendor familiarity and comfortable relationships." However, he added, there are a lot of types and sizes of service providers, and there is a lot of room for various products and companies.