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VPN Technology Advances

Virtual Private Networks (VPNs) have been deployed for corporate data processing systems since the early days of mainframe computing.  However, with the greater ubiquity and affordability of bandwidth in recent years, applications that utilize VPNs have evolved from simple remote terminal data transport to encompass a variety of video, voice, and corporate IT functions.  VPN technology has recently been evolving as well, increasing the types of VPN options available to organizations deploying VPNs.

One recent evolution in VPN capability has been the advent of network-based VPNs.  These VPNs have eliminated the need for carrier-supplied routers or other special devices at the customer’s location, performing VPN functions instead inside the network provider’s “cloud”.  Cost and flexibility benefits that accrue from this approach, as the corporation using network-based VPNs can readily add or reconfigure VPN ports without requiring the carrier to upgrade or modify their on-premise equipment.  These new VPNs also support a variety of data, voice, and video services on the same physical connection, thus reducing network expense.

Another advantageous development has been the availability of Layer 2 VPNs, also known as Virtual Private LAN Services (VPLS).  These VPN systems allow customers to interconnect their networking devices across a simple logical-layer connection, so that any Layer 3 network tunnels between customer locations can be established and controlled entirely by the customer without involving the carrier whatsoever.

Along with these developments, the availability of Gigabit Ethernet interfaces to VPNs have opened up new applications for cost-effective VPN-based data replication, real-time video, and multiple services on a single interface (“Multiservice Ports”).  Additionally, Network-to-Network Interface (NNI) standards have been evolving to support these services, allowing carriers to interconnect their networks at the VPN service layer, permitting global corporations to deploy advanced, worldwide VPNs for all of their corporate data, voice, and video traffic.

Content Delivery Networks

Facilities-based Telecom Service Providers have been the primary suppliers for high-speed corporate internet connections.  However, these service providers have been battling ever-increasing equipment costs associated with transporting bits from their origin across their networks to the ultimate destination.  Additionally, when the end user’s customer requests information, there is a certain delay that is caused by these bits “transiting” the internet network.  The further the bits must be moved, the more likely it is as well that there will be a bottleneck in the transmission path.

To combat these and other issues, Telecom Service Providers are turning to an alternative technology, Content Delivery Networks (CDNs).  The concept behind a CDN is to move the required bits across the long-distance network once, to an edge storage device near to a densely-populated group of end-users, and then serve that population of regional end-users from the edge as they request copies of web pages, downloads, and other internet data.

Not only does the CDN save on transit costs and alleviate reliability concerns for the customer, it also saves network bandwidth as the information is not repeatedly sent from its origin to distant locations.  This reduces the cost basis for the carrier and makes internet service more profitable, improving the viability of the provider.  It is for this reason that the largest carriers are developing and rolling out CDN strategies that involve both partnerships and home-grown CDN solutions.

Carriers offering CDN capability while owning the underlying network have an inherent cost advantage over both CDN-only providers and other carriers who do not operate their own CDN.  It is for this reason that leaders in the CDN space are focusing on their ability to provide value-added, high-margin consulting services to aid their customers in developing their CDN platforms.  Profitable standalone CDN providers are highly reliant on the revenue stream generated by their professional service groups.