From Asia Computer Weekly:
IP-VPN starting to take off in Asia-Pacific
Frances Chan, Jan 21 2002
While Frame Relay is still the preferred choice of virtual private network (VPN) service for most Asian enterprises, migration towards the Internet protocol (IP) platform is taking off in Asia-Pacific due to its advantages of security, scalability and lower costs.
Research firm IDC expects IP-VPN service revenue attributable to telecom carriers to grow at a CAGR of 66% to US$3.02 billion by 2005 in Asia-Pacific, excluding Japan. Competitive pressure is the key driver for incumbent operators, competitive carriers and global service providers to introduce IP-based services, particularly IP-VPN services, said Grace Yeo, research manager, Communications Research, IDC.
However, there are still questions regarding the true value of IP-VPNs, and at the end of the day, business benefits are not always clear up-front.
There is an urgent call for the industry to heighten the degree of clarity in terms of the prospective benefits of IP-VPNs compared with Frame Relay and asynchronous transfer mode (ATM).
Ian Ross, director, Intelligent Internet Marketing, Nortel Networks Asia Pacific, said there is a lot of confusion as to what IP-VPNs are and the value that they offer to businesses.
The business benefit of IP-VPN, according to Ross, is to allow enterprises to harness Internet economics to provide newer and more efficient cost structures than that offered by the present mode of operation of removing the need for expensive leased line circuits and ATM network architectures. This would greatly reduce the cost of inter-site communications.
John Mak, systems engineer manager, Cisco Systems, said typical examples of IP-VPN applications are corporate networks with dispersed geographic coverage or multi-national locations. For IP-VPN services, the branch office only needs to apply a local leased circuit for connecting to the public Internet.
But complexities are stimulated not only by the rapid evolution of this area of networking, the aggressive marketing of many service providers and vendors, but also the varying capability for customers to modify their networking stereotypes to embrace these methods of networking, Ross said.
Benny Lee, head of sales and marketing for Asia-Pacific and Australasia, Equant, agreed that different definitions of IP-VPN exist in the market which makes the picture more complicated.
Lee said one has to define what one means by an IP-VPN first. For instance, is it when VPN delivers using IPSec over the Internet or by using multiprotocol label switching (MPLS) over a private network? The former may not be defined as secure, Lee said, as the VPN is subject to denial of service attacks, and every point that a company connects to the Internet needs firewalling and controlling, although the data is encrypted.
However, using MPLS-based IP-PVN, which can work with IP, ATM and Frame Relay network protocols, is safer in the sense that there is no connection to the public Internet and hence data cannot be intercepted by unauthorised persons and it does not need encryption.
On top of that, MPLS-based services can also deliver the end-to-end class of services that Internet-based services cannot, Lee explained.
Alan Pettigrew, marketing director for Asia-Pacific and Japan, Juniper Networks, noted that questions about IP-VPN are due more to the lack of education than technical limitations.
“As enterprise customers strive for less complexity, lower capital outlays, service level agreements and quality of service, service providers can meet this demand by providing flexible VPN services at the right price,” Pettigrew said.
Improved QoS
IDC’s Yeo sees improvement in the overall quality of service and security requirements, that possibly match or exceed the expectations currently derived from Frame Relay or ATM, as MPLS and IPSec technologies are being introduced into IP networks to allow for secure remote access as well as traffic engineering.
Yet, migration and adoption of IP-VPN may have slowed down slightly in Q4’01 due to the lack of corporate confidence arising from the prolonged economic recession.
“WAN managers are being pressured not to spend on ‘uncertain’ investments. As the Asia-Pacific economy is likely to recover after Q4 this year, IP-VPN is likely to see considerable take up,” Yeo said.
Pettigrew said IP-VPNs will not replace ATM in 2002, since there is significant investment in ATM networks so there will be a period of transition from ATM and Frame Relay to IP.
According to a survey conducted by IDC in 2001, Australia led the pack in terms of current adoption of IP-VPN service, followed by Hong Kong and China.
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