Virtual Private Networking in the Hosting Environment
The high cost of incorporating new staff, training existing personnel and independent product development have driven many companies to consider outsourcing as an alternative to doing it alone. We see this trend in the manufacturing sector, with suppliers providing bundles of parts rather than single components. We see it throughout the business world, with human resource personnel turning to temporary employee agencies for administrative and technical staff rather than recruiting new employees. And, we see it in the IT and biotech sectors, with suppliers providing programming and testing skills..
- THE APPLICATION SERVICE PROVIDER
- MANAGED SECURITY
- SECURE NETWORK HOSTING
This trend is also apparent in the IT solutions market. From web hosting to ERP systems and to security, more and more companies are turning to service providers for an increasing array of products and services. Product, integration, maintenance, support and even upgrading, all comes under the rubric of outsourcing, with the costs of IT solutions being spread out over a monthly leasing plan and the learning curve involved in incorporating such systems carried by the service provider.
This final section will look at ways in which system integrators and service providers can take advantage of IPSec VPN to expand their business offerings. Different than the first three sections of this study, although keeping with concept of relaying real world examples, here we present the subject from the perspective of users, integrators and service providers. We will discuss cases where all sides have noticed the clear business benefits of IPSec Virtual Private Networking. And, rather than reviewing the before and after of specific case studies, this section will focus on the types of offerings to which IPSec can be integrated.
HOSTING CASE STUDY 1 - THE APPLICATION SERVICE PROVIDER
Among the fastest growing system integration markets internationally is the application service provider (ASP) sector. The August 13, 1999 issue of VAR Business describes the potential of this area as follows:
At the end of 1998, 49 percent of VARs who responded to the annual VAR Business State of the VAR Market study told us they planned on changing their business models this year . . . For hundreds of VARs nationwide, that something new is the application service provider (ASP) market. Rather than sell solutions to customers, ASPs implement, host and maintain solutions for a fixed monthly fee.
Other testimony regarding the future growth of ASPs can be found in work by Forrester Research:
By 2001, 15 percent to 20 percent of packaged application software licenses will be in the form of rentals . . . During the next five years, the market for application rentals over the Web will rise from near zero to $6.4 billion.
IPSec VPN solutions fit into the ASP mold by allowing integrators to use the Internet as the access mechanism to their application servers. Thus, rather than customers having to bear the cost burden of purchasing $500,000 ERP software, for example, they lease solutions hosted by an ASP and link to the applications over the Internet.
The ASP model is attractive to all parties. It gives customers a cost-effective solution and allows VARs and integrators to adapt to a challenging marketplace in which telecomms, service providers and distributors compete in an environment of challenging competition and reduced margins.
The specific ASP case study presented here is a technology start-up rather than a VAR restructuring itself. Based in the United States, the company has offices in Germany, Switzerland, Hungary and Hong Kong.
The start-up recognized the potential of Internet-based application management. download ultrasurf As a result, it joined forces with an IPSec vendor to provide public sector enterprises with affordable and secure SAPTM R/3® solutions.
The combination of the two companies gives it the chance to reach an untapped market segment. Managed application services with IPSec VPN gateways facilitate the provision of leased ERP applications to public sector mid-size entities and organizations, in a secure and affordable monthly per-user payment scheme. Built on the foundation of combining specialized SAP implementation consulting, hosting through the Internet, and providing robust security, it is now feasible for companies to pay monthly fees to access SAP's enterprise resource planning (ERP) in addition to other SAP application programs.
HOSTING CASE STUDY 2 - MANAGED SECURITY
The VPN user in this case is an investment company, with several sites in the United States and Canada. Until recently, these were isolated in so far as data communications are concerned. The company came to the conclusion, though, that it had to allow for the networking of its offices, but it did not have the human resources needed to carry out such a project on its own. As a result, the company chose to outsource to a system integrator, both the development and management of the project.
The solution the integrator chose was to connect the sites through a public frame relay network, using IPSec gateways between the sites to ensure complete privacy when data was transferred within the network. Bulletproof security was a must in this case as the customer's work involves sensitive financial matters. Security of data transmission and network management was an absolute must.
Unlike the previous Intranet cases presented here, the user does not manage the network independently. Instead, the investment house relies on the integrator to maintain the secure network and manage its data protection policies. By using a VPN gateway located at its premises, the system integrator remotely manages both the VPN and the other networking devices located at the customer sites, with IPSec protection applied to all management traffic.
Using the managed Intranet VPN, the employees of the investment house share files and databases, simplifying their work process and improving productivity. And, by outsourcing the project, additional staff was not required, nor was training necessary for the management of the network and its security provisions.
For the integrator, a new business opportunity was created in which it could offer network integration as well as communications provision and management. It expanded its offerings into the service provider sector, in potentially lucrative markets that were previously untapped.
HOSTING CASE STUDY 3 - SECURE NETWORK HOSTING
The company described in this example offers a secure hosting service. An international ISP, the company gives its customers a complete solution for communications outsourcing. The business model is to transfer as many networking components as possible from the customer's premises to the ISP's and to assign management and maintenance responsibilities to the ISP as well. Ultimately, the customer's sites include only personal computers connected by a LAN. All other aspects are taken care of by the ISP.
In practice, corporate information is kept on servers located and maintained at the ISP premises. Access to these servers is achieved over the ISPs managed IP network. In order to control which companies have access to what data, the ISP includes an IPSec gateway at its premises and leases another at the customer's offices. Corporate data travels from the ISP server farm to the corporate site over secure connections. Through encrypted tunnels, the ISP's customers are assured that third parties or other ISP customers have no access to sensitive data
For the ISP, the hosting service allows for the effective business use of existing infrastructure. The service gives the ISP's customers a cost-effective business solution without the ISP having to invest in additional bandwidth