VPN outsourcing

Firms are using managed services to circumvent the staffing burden of maintaining VPNs.

For most companies, moving to an IP-based VPN to enjoy savings and flexibility is an easy decision. But it's not a cinch to manage a secure network. VPN deployment, monitoring and maintenance can be complex chores that strain IT departments.

At first, most network executives attempt to manage their VPNs in-house. But more are looking for help from third-party experts. According to a recent study from IDC, 75% of 400 WAN managers surveyed said they manage VPNs in-house. Still, 12% of respondents completely outsource their VPNs, while 11% jointly manage their VPN along with a third party.

Some companies that have made the outsourcing plunge are keeping the size of their IT departments in check and are better utilizing their workers' skills.

To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

For most companies, moving to an IP-based VPN to enjoy savings and flexibility is an easy decision. But it's not a cinch to manage a secure network. VPN deployment, monitoring and maintenance can be complex chores that strain IT departments.

At first, most network executives attempt to manage their VPNs in-house. But more are looking for help from third-party experts. According to a recent study from IDC, 75% of 400 WAN managers surveyed said they manage VPNs in-house. Still, 12% of respondents completely outsource their VPNs, while 11% jointly manage their VPN along with a third party.

Some companies that have made the outsourcing plunge are keeping the size of their IT departments in check and are better utilizing their workers' skills.

Before switching to a fully managed VPN with WorldCom in 2000, Toyota Motor Sales, USA used a legacy 19.2K bit/sec dial-up network to connect AS/400 systems at dealer sites to a mainframe at the data center in Torrance, Calif.

Although the system worked, it was antiquated, says Bill Strickland, national technology manager for IS LAN/WAN services at Toyota. After the company decided to use more Web applications, Toyota chose an outsourced VPN primarily because it was more cost-effective and better suited for the future.

"We have a group of 1,100 Toyota and Lexus dealers that communicate with the factory to order cars, parts, do warranty claims and vehicle financing," he says.

The old dial-up network required only one person to support it, but Strickland estimates he would need between eight and 10 full-time network engineers to support a VPN in-house. "This type of network environment requires more care because people in car dealerships don't really know all about IP or the impact of a circuit going to Toyota," he says.

Toyota hired four people to manage the outsourced relationship, but those employees primarily address dealer issues with accessing the manufacturer's portal site or basic connectivity questions. While devoting four engineers to manage an outsourced relationship might seem excessive, Strickland says he took this "high-touch" approach because the dealers who access the VPN are typically not IT-savvy.

Another reason he put the four engineers on the job is because it's in Toyota's best interest from a customer service perspective. "If a dealer can't order parts for your Camry because the VPN is down, then you're an unhappy Toyota customer," he says.

The additional staff needed to support the VPN internally would have cost significantly more than outsourcing, Strickland says. Network administrators earn between $45,500 and $65,750 per year, according to IT staffing firm Robert Half Technology, while VPN or network security administrators typically command between $62,500 and $88,250. Based on these figures, Toyota is saving at least $182,000 to $273,000 per year by not hiring four to six more network engineers to manage the VPN.

Instead, Toyota was able to add four Web application developers for the IS department. This has helped grow the portal site, which hosts 125 applications and is a critical means of communication between Toyota and its dealers, Strickland says.