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Large carriers have been launching different virtual private network services for three years now, and failed to spark mass adoption of the technology because they are the wrong companies to bring the technology to businesses, the founders of new VPN startup Virtela Communications said.
Taking a page from AOLs play book, Virtela leases the entire network that it needs to bring VPNs to a wide array of businesses. It is also positions itself as a VPN provider, as opposed to bandwidth reseller, and supports this stance with service-level agreements (SLAs) that guarantee application performance – not network quality.
“Virtela has one goal: to bring private networking to enterprises,” said Vab Goel, Virtelas chairman and CEO. “We believe that enterprises didnt take advantage of the disruption that IP technology brought.”
Scheduled to launch on Oct. 15 with several customers aboard, Virtela plans to use public Internet backbones, T1 (1.5-megabit-per-second) leased lines that are available from most regional Bells and edge routers from companies that could include Cisco Systems, CoSine Communications and Lucent Technologies, to pull together a virtual network that would deliver affordable VPN services to enterprises. Virtela needs to sell its VPN service to 500 locations to break even on its network costs, Goel said.
Virtela is funded with $75 million, according to Goel. The company turned down vendor financing offers and took in investments from a number of venture capital funds, such as New Enterprise Associates, Norwest Venture Partners and Palomar Ventures. It also received investments from Juniper Networks, RSA Security and Symantec. Goel, currently also a partner at Norwest, was involved in building data networks for Qwest Communications International and Sprint. Most other management team members also have operations backgrounds with Qwest and Sprint.
So far, customers are enthusiastic. Boston-based design firm AnalytX is using Virtela to venture into videoconferencing, a technology previously too expensive to deploy over other virtual networks. Another customer, the international engineering firm Winphoria Networks, is using Virtela instead of running its own VPN service in-house.
“I have looked at VPN offerings from larger carriers, and they were too big for me to accomplish what I need to accomplish,” said Dave Heafey, Winphorias IT director. “Virtela is very flexible, and created a support plan for us around what we need.”
Heafey liked that Virtela was able to set up a managed VPN service over existing Internet access pipes, for the most part fractional T1 lines from a motley collection of carriers in India, Spain and the U.S. He was also excited about an SLA that Virtela gave Winphoria that covers such unusual aspects of data connectivity as jitter – an essential coverage for applications such as voice. Such application-specific SLAs are at the core of Virtelas philosophy.
“You wont find anybody offering SLAs for applications,” Goel said, adding that having such SLAs is part of the “magic” technology that Virtela has developed.
Upon closer examination, the “magic” appears to be a collection of hardware and software products designed to monitor traffic moving through Virtela-managed networks, and to assign higher- and lower-level priority to data supporting different kinds of applications.
Notably, Goel is adamantly against Multiprotocol Label Switching as a network technology that could support such SLAs. He said that MPLS technology was not designed to support VPNs, and is not widespread enough to deliver such traffic information from different carrier networks. Virtela, he pointed out, is poised to trump larger competitors because it is network- and technology-agnostic, managing dial-up and leased line VPNs alike, delivered over any number of individual connections, through any number of carriers.
“IP goes beyond a single carrier network,” Goel said.