VPN stands for Virtual Private Network. VPN is a data network connection that makes use of the public telecommunication infrastructure but maintains privacy through the use of a tunneling protocol and security procedures. It operates much like a Wide Area Network (WAN).
Most companies actually leased lines, but in either case both solutions are very expensive. As the Internet became more widely available people started creating VPN solutions that took advantage of the cheap network access. The idea was to use the Internet's existing links to create a virtual circuit.
Advantages and Disadvantages of VPN:
Virtual Private Network presents some advantages over the traditional network technologies. VPN offers direct cost savings over leased lines or long-distance calls for remote access, savings resulting from reduced training requirements and equipment, increased flexibility, scalability, and security. The main advantage of VPN is the cost savings of Internet VPN when compared to networks built using conventional leased lines. Leased lines include tariffs that have an installation fee, a fixed monthly cost, and a mileage charge. The cost to an organization of traditional leased lines may be reasonable at first but can increase exponentially as the organization grows. As an organization grows and more companies must be added to the network, the number of leased lines required increases dramatically. VPN that utilizes the Internet avoids this problem by simply tapping into the geographically distributed access already available. Another way VPN reduces costs is by reducing the need for long-distance telephone charges for remote access. Instead of having the offsite team of a company dial into the corporate modem bank via long distance lines, the company's VPN allows them to simply place local calls to the ISP's POP in order to connect to the corporate network. Moreover, VPN allows the creation a secure private network over a public...
Cited: 1- Introduction to VPN, "Pros and Cons of VPNs" http://compnetworking.about.com/od/vpn/l/aa010701c.htm
2- Nortel Networks, "Virtual Private Networks and IPsec" http://www.nortelnetworks.com/products/library/collateral/12002.25-03-02.pdf
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