Virtual Private Networks simplify communications

Matt Bellm -- Control Engineering, 4/1/1998

One of the latest trends in corporate networking and supply-chain strategies is the virtual private network (VPN). As the name suggests, a VPN is not a truly private corporate network, but an alternative to a traditional wide-area network (WAN).

One advantage of VPNs is companies are able to reduce network maintenance costs by using the Internet and Internet Protocol to connect locations instead of using high-cost dedicated phone lines. Network support costs are also reduced by shifting maintenance responsibilities to an Internet service provider (ISP). VPN vendor TimeStep Corp. (Kanata, Ontario, Canada), reports that the costs for a company to connect five remote sites using a VPN would be half that of a traditional WAN.

VPNs also offer more scalability than WANs. The only cost of adding a new location is that of connecting it to the Internet. Even remote users, such as sales people and other field employees, can gain direct access to a company's network with little cost and relative ease.

VPN protocols address security issues by specifying methods for data encryption, client authentication, and host access control. As data is transmitted to a particular IP address, a proxy server, router, firewall, or network operating system determines whether or not that data requires encryption. Off-the-shelf VPN packages are now available to monitor these operations. Forty-bit data encryption is considered a minimum, with 112-bit quickly becoming standard.

While a VPN is a simple solution for companies interested in connecting their own facilities, potential problems could lie ahead for companies wishing to connect to other businesses. Differing VPN protocols used among businesses must be able to communicate with each other. Current attempts to partner multiple companies who use different protocols presents quite a problem. The problem lies in a three-way tug-of-war between three VPN standards: Point-to-Point Tunneling Protocol (PPTP) endorsed by Microsoft (Redmond, Wash.), Layer Two Forwarding (L2F), and the IP Security Protocol (IPSec). Each protocol performs the required authentication, access control, and encryption differently. Steps to combine the three into one overarching standard called Layer Two Tunneling Protocol (L2TP) are underway, but a final standard is not imminent.

Unwilling to wait for the computer industry to agree on a single protocol, the auto industry is implementing a VPN on its own terms. The Automotive Industry Action Group (AIAG, Southfield, Mich.), is developing the Automotive Network Exchange (ANX) protocol. ANX addresses the technical and administrative issues involved in switching from what the AIAG Implementation Task Force dubs "complex, redundant, and costly multiple connections."

On the technical side, ANX standardizes by using TCP/IP for communication and IPSec for security. However, as important as the protocols are in ANX's success, reliable Internet service providers will be crucial.

In August 1997, AIAG named Bellcore (Morristown, N.J.) the ANX overseer company. Bellcore is responsible for evaluating service provider candidates, developing standards for traffic exchange between service providers, resolving data communication problems between trading partners, and monitoring service provider compliance.

Thomas Hoy, executive director of AIAG, believes that ANX is a plan that will radically change supply-chain communications.

The efforts of AIAG could pave the way for substantial changes in supply chain communications throughout the automotive industry. ANX could also prove to be a foundation that other industries will build from in order to make business networking more reliable.