A VPN is a virtual private network. That's not to be confused with a truly private network, where you own the wires all the way from point A to point B, and nobody else can use them. In a VPN, some part of the path from A to B is a public network such as the Internet or the public telephone system. The VPN provider (through judicious use of software) builds a "tunnel" through that public system for your private data traffic.
Say point A is the network at Acme Kazoo corporate headquarters in Missoula, Mont., and point B is the company's distribution center in Fuquay-Varina, N.C.
One option for connecting the two is to lease a line from point to point. Since the line is private, no one else can use it, and Acme always knows how much bandwidth is available. The problem is that such lines are typically paid for by the mile, so the communications bill can add up pretty quickly regardless of whether Acme is actually using the line or not. A VPN offers a cheaper solution. In a VPN, Acme dials up or leases a private connection from the HQ to a local Internet service provider (ISP) in Missoula and forges a similar link from the distribution center to the ISP's hookup in Fuquay-Varina. Those connections are short, local lines. The Internet-which of course levies no distance-based charges-completes the loop between the two points.
To Acme's users at either end, it appears as if they are both on the same local network (although the connection is perhaps a bit slower).
The Internet is not the only public network that can provide the long-distance part of the VPN connection. Big telcos have all sorts of public bandwidth available, so VPN seekers have some options. For example, frame relay is a common alternative networking technology for VPNs (but frame relay is a whole 'nother Learning Curve).
I like the part about cheap. But what's the catch? Using Internet and private in the same sentence is a whopper of a contradiction. The corporate world isn't crazy about sending sensitive information over that very public part of a VPN. In practical terms, information passing over the VPN will potentially be routed through several computer systems (servers that are part of the Internet) that are not under the control of the sender. Thus an important part of any VPN is the encryption or protocol that will secure the data stream from prying eyes. (For another look at VPNs, see "The Bargain Hunter's Guide to Global Networking," CIO Section 1, April 1, 1999.) Also, the Internet is quite flaky in terms of providing consistent, reliable bandwidth and performance. If you lease or buy a private network, that means no one else is using it and all the bandwidth stands ready for your use. Data running over the Internet, on the other hand, can sometimes run into traffic jams as it competes with usage by other people and companies.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.