Cogent developing network-based VPN offering

Cogent will add a network-based VPN offering to its suite of Internet access products later this year, company officials say.

The VPN offering is one of several enhancements that Cogent is planning in 2004. Other enhancements include adding 40-plus buildings to its North American metropolitan-area networks and upgrading its European backbone to provide high-speed Internet access.

Cogent currently provides high-speed Internet access in 30 metropolitan areas in the U.S. and Canada. The carrier targets large multi-tenant buildings in central business districts, and it has hooked up 850 such buildings so far. 

The service provider offers dedicated 100M bit/sec and 1000M bit/sec Internet access over its 80G bit/sec backbone. Altogether, the company owns 19,900 route miles of backbone and metropolitan fiber in the U.S.

Cogent recently purchased a fiber network in Europe, which is being upgraded to provide high-speed access services in nine countries including the U.K., France and Spain (see previous newsletter).

The company boasts a 4,200-strong corporate customer list, which includes 60 of the top 100 law firms in the U.S. as well as more than 150 universities and 500 service providers.

Until now, Cogent has been providing its enterprise customers with pure Internet access with the customer building their own CPE-based VPNs.

“To date, our strategy has been to provide the underlying network and allow the customer to build their own VPNs on our network,” Cogent CEO Dave Schaeffer says. “There are a number of different flavors of VPNs – IPSec, [Universal Transport Interface] tunnels, Layer 2 and Layer 3 tunnels – and we support all of those.”

Now Cogent is developing a network-based VPN offering that will be built upon Multi-protocol Label Switching (MPLS), an emerging standard that provides different classes of service for voice, video and data applications.

“It is our intention over the next year to begin to offer a network-based MPLS VPN so customers can elect to outsource that,” Schaeffer says, adding that product will be available during this calendar year.

Unlike the top-tier global ISPs – AT&T, MCI, Sprint, InfoNet, Equant and British Telecom – Cogent offers Internet access services only. It doesn’t support voice or other data capabilities including frame-relay or ATM.  By offering a network-based VPN solution, Cogent will expand beyond its Internet-access focus for the first time.

“Most of our customers use us for Internet access, not for replacements for frame-relay, ATM or private networks,” Schaeffer says. “Some of our customers are starting to migrate to IP VPNs and run them in parallel to frame-relay networks or replace the frame relay networks. We think over the long haul, that’s going to be a significant opportunity.”

When its European network upgrade is complete, Cogent will offer network-based VPN services there as well.

Cogent also is expanding its offerings in the U.S. and Canada, with plans to add 40 multi-tenant buildings to its network.  In Europe, Cogent is adding 25 collocation facilities to its network. 

“Our goal is to fully integrate and update the European network to be [equal] to the U.S. network,” Schaeffer says. “We’re going to continue to add locations that make sense onto our network, and we’re going to continue to increase our penetration in the facilities we already have [connected to Cogent’s backbone network].”

Cogent is a publicly traded company, which has Cisco as one of its largest shareholders.