December 19, 2000, 4:07 PM — The VPN market is hot. Driven by fear of hackers and the economics of the Internet, VPNs -- which create encrypted data tunnels through the 'Net -- are becoming almost commonplace. Every network manager should be thinking about how to fit them into their short- and long-term strategies.
Five trends dominated the VPN market this year: consolidation of major players; an introduction of high-performance products at lower prices; validation in the high-end enterprise market; heavy adoption of low-end products; and the lack of excitement over Windows 2000.
For 2001, there is an even rosier view for corporate network managers looking at buying and using VPN technology. With their favorite vendors finally getting serious about VPN hardware and software, the spectrum of possibilities has become broad enough to make even the most conservative network architect comfortable.
The promise of IP Security's (IPSec) standards is also coming to fruition. Although the Holy Grail of all standards -- multivendor interoperability -- is still touchy, interoperability problems surrounding IPSec are more the exception than the rule now.
Consolidation that creates value
There are as many VPN players today as there were a year ago, but things have shifted considerably. Once dominated by dozens of small companies competing in the VPN hardware arena, the scope of the VPN market now has an expanded spectrum of products. Those include carrier-class hardware, network-based providers, managed services, conversion and compatibility service vendors, and super low-end VPN hardware and software products.
The heavy hitters in the network business have made their VPN moves. Cisco acquired Compatible Systems and Altiga, and has begun to push Altiga-based products hard to its customer base. At the same time, 3Com exited the enterprise VPN marketplace. Its outstanding Pathbuilder product line, which had excellent VPN performance, has fallen through the cracks in 3Com's on-again, off-again corporate network strategy. Still, 3Com introduced a crypto-accelerated network interface card, showing that it's not so uninformed as to completely leave VPN technology out of its product mix.
In addition, Timestep was gobbled up, first by Newbridge Networks, and then by Alcatel. Similarly, Network Alchemy became a Nokia subsidiary, while Indus River became part of the Cabletron spinoff Enterasys.
This continuing consolidation opened space for a variety of players at other levels of the VPN maarketplace. For example, Cosine Communications, a manufacturer of carrier-class hardware, burst onto the scene with its VPN products, challenging Nortel Networks for the potentially lucrative carrier market.