SingTel ConnectPlus IP VPN - Manufacturing - Sponsored Whitepaper

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IP VPN can be defined as an emulation of a private Wide Area Network (WAN) facility using IP facilities (including the public Internet, or private IP backbone). While traditional Virtual Private Networks (VPNs) such as Frame Relay (FR) and Asynchronous Transfer Mode (ATM) are expensive to roll out, scale up and maintain, IP VPN permits an economical means of equally secure, encrypted or encapsulated data transmission between a company's private network and remote users through a third-party service provider. The result is effectively a private network for each VPN customer that is logically separate from the public internet. Manufacturing firms with far-reaching networks and offices can delight in a dedicated and secure express VIP courier-like delivery of their data within their global community.

IP VPN is often regarded as the outsourcing solution to an organisation's data transportation needs. As service providers have invested in the infrastructure required to deliver high-quality IP VPN, customers from the manufacturing sector are increasingly using them for large portions of their sensitive data and voice traffic. IP VPN is one of the fastest growing market segments in the telecommunications sector, driven by growing demand for the flexibility and cost-savings offered by IP to the enterprise. IP VPN revenue figures showed a growth of 11.4% in year 2006 in the Asia Pacific markets, expected to grow strongly at a CAGR of 9.1% until 2010.

This paper outlines the value of IP VPN for manufacturing companies. For some firms, lower costs and ease of deployment give enough motivation to embrace this approach. A safe and secure upgrade path for the future is also guaranteed. But the ways in which IP VPN (based on MPLS) is implemented yield additional benefits that are important now and will become increasingly compelling as latency-sensitive applications such as voice and video become more integrated into routine commerce.

A. Legacy WAN Technologies Traditional WAN uses leased lines or dedicated circuits – e.g. FR or ATM connections – between multiple sites. It is analogous to hiring one's own fleet of postmen to deliver private data packets between two locations. If a company decides to expand its operations overseas or to a remote office within the country, the infrastructure that accompanies postal delivery services would have to be built accordingly. Any attempt to upgrade or expand a traditional WAN network would be technically challenging, time consuming and costly.

The privilege of a private postal service may sound attractive, but there are inherent problems. With often only two busy periods a day, it is neither efficient nor cost-effective to hire a full contingent of postmen during the slack times. Yet the postmen need to be on stand-by at all times to accommodate any increase in the volume of post. Such extra capacity is akin to “over-provisioning” in traditional WAN technologies to prevent saturation of the networks by bursty1 internet- based applications as well as voice and video data transmission.
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