Verio Unveils VPN Managed Service for the Enterprise

Organizations transition from frame relay to IP VPNs

Managed services provider Verio Inc. is betting that mid-market and large enterprise customers are ready for IP virtual private networks (VPN).

Verio, a subsidiary of telecommunications giant NTT Communications unveiled a new virtual private networking (VPN) outsourcing service, Safeguard VPN.CPE, slated for customers in mid-market and large enterprise accounts.

Verio has for some time marketed a network-based VPN solution, but VPN.CPE is its first managed offering that uses security devices located on customer premises—hence the designation customer premise equipment (CPE).

Several trends have emerged to drive the adoption of IP virtual private networking (VPN) solutions, not the least of which is the allure of substantial total cost of ownership (TCO) reductions. In a report last year, for example, market research firm In-Stat/MDR speculated that customers would increasingly abandon legacy frame-relay solutions for IP VPNs as a means to consolidate both their Internet access and WAN connectivity on a single solution—IP VPN.

Mitch Ferro, VP of product engineering with Verio’s broadband services division, confirms that frame relay-to-IP migrations have helped to drive uptick of his company’s managed IP VPN services. “One of the nice advantages [of an IP VPN] is that it can be used for both Internet access and for VPN, as opposed to having two—one for Internet, one for frame relay.”

In addition to TCO considerations, companies are abandoning frame relay WANs because of the ubiquity of IP and the requirements of IP-based applications, says Susan May, director of security product management with Verio. “I think primarily the adoption of VPNs is being driven by the need to have better support around IP applications. IP is becoming very ubiquitous as a network protocol, and if a company is predominantly IP [across its internal networks], it makes sense to standardize on IP for both Internet access and VPN.”

Verio’s SafeGuard VPN.CPE leverages a managed Cisco IP VPN security device that acts as an IP router and a VPN gateway, and provides a content-based access control (CBAC) firewall. It supports dedicated access speeds from T1 to OC3. In addition, stresses May, SafeGuard VPN.CPE is available even to customers who contract with other providers—such as WorldCom Inc., Sprint, or AT&T, among others—for their Internet access. “Obviously, we’d prefer that they get their Internet access from [Verio], but if that’s not possible for whatever reason, we will allow them to use other Internet services.”

May says that Verio will handle all of the particulars of an IP VPN for customers, including procuring CPE hardware and providing 24x7 CPE management and CPE field replacement. In addition, she points out, VPN devices are owned and managed by Verio, which means that customers don’t need to incur capital expenditures for VPN equipment upfront.

Verio has also pledged to support a range of VPN-specific service level agreements, including proactive VPN CPE outage notification, VPN hardware replacement and VPN time-to-repair guarantees.

The market for IP VPN-related services was red hot last year. By the end of Q3 2002, for example, In-Stat/MDR reported that most U.S.-based purveyors of IP VPN services were on track to post 15 to 20 percent revenue gains for the calendar year. The research firm also projected that IP VPN-related revenues will continue to expand at a compound annual growth rate of 33 percent between 2001 and 2006.

For traditional purveyors of managed network services, IP VPN services were one of the lone bright spots in 2002. In-Stat/MDR senior analyst Henry Goldberg indicated that many service providers reported that IP VPN-related revenue growth outpaced growth associated with their other networking service offerings.

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About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.