IP VPN services offer new features

Over the next few months service providers are expected to add new features to their VPN services, fleshing out their offerings in the hope that they will ultimately become the industry's dominant network service.

AT&T, Verizon and custom VPN service provider Blue Ridge Networks say they will introduce capabilities to make more efficient use of the access lines that connect to VPN services and to give customers more flexibility in the type of technology that runs over these lines.

These services are undeniably becoming more popular, according to industry experts. In the U.S. alone, IP VPN services will hit $5.8 billion in 2009, says Vertical Systems Group, up from $1.8 billion last year. Worldwide, businesses will spend $29.9 billion on VPN services in 2009, according to a report from Infonetics. That is about 10 times what they will spend on VPN gear for setting up do-it-yourself VPNs, the report says.

The touted advantages of VPN services as opposed to build-your-own are they require less corporate manpower and training, lighten maintenance and management burdens, and support fully meshed networks without the complexity and cost of virtual circuits that are required with frame relay.

The VPN services vendors seem to be making inroads. IP VPNs will be eating away at hugely popular frame relay services, according to a study by In-Stat. Frame relay service revenues in the U.S. will drop below $7 billion by 2009 from $8.3 billion in 2004, In-Stat says.

This trend is pushing service providers to make it easier for businesses to forego frame and adopt IP VPNs. A new feature from Verizon, for instance, will make it possible to connect customer sites to its network-based MPLS VPN service using T-1 or T-3 lines. Sites connected by these private lines will be able to communicate over the VPN with sites connected by other technologies - frame relay, ATM or Ethernet.

The upside is that customers can use the IP VPN service without worrying about what access method is available. It also lets them tie into the VPN from virtually any site that has a network connection. The company says it is working on a service to support blending DSL-connected sites into the VPN backbone, too, as well as using high-speed wireless EV-DO technology.

Verizon's hope is that as customers' frame relay contracts expire, they will sign up for IP VPN services that offer similar functionality for less, but also offer new features, says Mike Tighe, director of advanced data services for Verizon. "As the contracts run out this gives a gradual way to migrate - no more simply re-upping a contract for frame," he says.

Other feature upgrades for IP VPNs include QoS to support the varying needs of different types of traffic. With its four QoS levels, Verizon says it is prepping VoIP service and IP Centrex services as part of its nationwide IP VPN services, to be announced within months. The network serves the largest 100 U.S. cities.

AT&T is adding the ability for a single site to support up to 12 logically separate VPNs over a single connection to its IP VPN service. This would be useful to companies that want to keep access to, for example, financial data, limited to a select group.