Will enterprise cloud services kill the VPN?

The business VPN service is still a healthy portfolio for Service Providers, but the rapid adoption of cloud services by the enterprises might be an inflection point. To understand that, let’s visualise the traditional Enterprise network topology with servers distributed in the different branches and its connectivity to headquarters. Let’s now visualise the next-generation enterprise that fully embraced employee mobility and have moved the IT infrastructure to the (private or public) cloud. In the traditional model, the VPN was the backbone spine of the Enterprise, while the next generation enterprise with all services in the cloud, has it’s backbone spin in the cloud or maybe on the Internet.  The enterprise adoption of cloud and mobility are moving Enterprise center of gravity from the VPN to the Internet. And of course, selling cost-effective pipes to the Internet is not as attractive as a business as selling high-margin VPNs.

If you can’t beat the enemy, join it

Cloud can be seen as the enemy, but it can also bring lots of new opportunities to service providers, as it does to enterprises. If we look at any analyst report, cloud is rapidly being adopted by enterprises. The top two aspects that hold back enterprises to adopt cloud massively are: availability and security. And telecom operators solve it.

Over-the-top (OTT) cloud providers can offer a service SLAs (service level agreement) within the infrastructure they control, typically their data centers. If something goes wrong in the access network, peering-points, etc… is completely out-of-control. Enterprises want higher availability and would prefer an end-to-end SLA, from the device (desktop, device…) to the cloud, no matter where the problem might be.

Security is also a big concern. Where the data sits? How safe is the environment?  Any regulatory compliance?… Once more, the (local) telecom operator that connects the enterprise users to the cloud can provide a better security environment compared to the OTT cloud provider.

Service providers can reposition themselves to become the backbone spine of the enterprise communications by offering a reliable and secure access to cloud services.