Cloud on the horizon for VPNs?

VPNs have been on the march in recent years and Point Topic estimates that worldwide revenues grew from $6.8 billion in 2006 to $11.7 billion in 2007.

It’s hard to say if we’ll see the same level of growth in 08 and 09. While VPNs have been increasing their penetration there is a challenge emerging as applications served direct from a cloud allow users to work outside the company network.

An indication of this comes from Salesforce. It recently reported that it had generated revenues of over $1 billion in the year to 31 January 2009.

The company claimed this made it the “first $1 billion cloud computing company”. This level of revenue is only possible because companies are prepared to move some business functions over to the cloud and provide applications in a distributed way. And it is possible to provide VPN-like functionality over the web with applications like GoToMyPC from Citrix or the new VPN replacement technology from Microsoft, DirectAccess.

Web interfaces will be an increasingly important way of delivering VPN, especially for mobile workers. Increasing use of software-on-demand applications such as Basecamp or Salesforce means that workers can access business applications from any browser at any time, without using a VPN. Cloud computing developments such as this will change the direction of VPN development, with browser access becoming more important.

Is it Cloud vs VPN then?

In Point Topic’s view, Cloud applications are going to influence the development of VPNs rather than replace them wholesale.

Security remains a major driver for VPN implementation as far as companies are concerned. Allowing employees to use applications outside the security framework of a VPN increases the exposure of companies’ data. In addition it is simpler in IT administrative terms to have users accessing and being queried by a central system.

IP VPN connections will continue to be the dominant mode of delivering business communications services over the next decade or so. By 2015, most business sites in the developed world will combine their voice and data services on one or more broadband connections which will give them full IP VPN capabilities.

Besides offering more cost effective communications for businesses and giving them access to a wider variety of applications than is possible today, being able to operate in an end-to-end IP environment will also bring substantial reductions in cost and improvements in efficiency for the telcos themselves. Telephony, conferencing and data traffic can all use the same network.

Networks are already embracing mobility as well as access from multiple locations. IP VPNs provide the platform to support these multiple modes of data access. The challenge is to maintain network security, especially with the possibility of mobile devices being lost or stolen.

We believe that standard IP VPNs will be around in parallel with these cloud-based alternatives, as they provide the benchmark for security, reliability and scalability. But web-based alternatives will continue to grow in popularity, particularly amongst smaller companies.

Point Topic