Rationale for VPN's

Organizations use VPNs to save money on renting and managing private lines between sites. Dedicated private lines are circuits used only by the organization that leases them monthly (more on dedicated private lines in the future). In contrast, virtual private networks use shared circuits (electronic paths between points) within carriers' networks. Carriers benefit by not having to dedicate as much infrastructure to single customers.

In addition, VPN installation intervals, the time between ordering service and implementations, are shorter than for new private lines, which take weeks to engineer. Thus, customers with existing virtual private networks can quickly add locations. The biggest delays revolve around new access lines, if they are not already in place between the customer and the VPN provider. If links to the carrier are in place, sites can be added in a matter of days using spare capacity on these links.

VPNs enable businesses to avoid administering growth and day-to-day maintenance of private networks. Adding capacity to a virtual private network is simpler than adding higher-speed, dedicated lines and new hardware to each site of a private network. The customer only needs higher-speed access lines from its building to the carrier's network. The carrier is responsible for making sure there is capacity in the network for the customer's applications.

Large organizations often have a mix of private lines for routes with the highest amount of voice and data traffic and VPN services for routes with less voice and data traffic.

In summary, VPN benefits include:
• Shared facilities may be cheaper - especially in CAPEX (Capital Expenditure) - than traditional routed networks over dedicated facilities
• VPNs can rapidly link enterprise offices, as well as small-and-home-office and mobile workers (more later this week)
• Can scale to meet sudden demands, especially when provider-provisioned on shared infrastructure
• Can reduce opex (Operational Expenditure) by outsourcing support and facilities