For years, voice, data, and just about all software-defined network services were called "virtual private networks" by the telephone companies. The current generation of VPNs, however, is a more advanced combination of tunneling, encryption, authentication and access control technologies and services used to carry traffic over the Internet, a managed IP network or a provider's backbone. . . .
For years, voice, data, and just about all software-defined network services were called "virtual private networks" by the telephone companies. The current generation of VPNs, however, is a more advanced combination of tunneling, encryption, authentication and access control technologies and services used to carry traffic over the Internet, a managed IP network or a provider's backbone.

The traffic reaches these backbones using any combination of access technologies, including T1, frame relay, ISDN, ATM or simple dial access. VPNs use familiar networking technology and protocols. The client sends a stream of encrypted Point-to-Point Protocol (PPP) packets to a remote server or router, except instead of going across a dedicated line (as in the case of WANs), the packets go across a tunnel over a shared network.

The general idea behind using this method, is that a company reduces the recurring telecommunications charges that are shouldered when connecting remote users and branch offices to resources in a corporation's headquarters.

The most commonly accepted method of creating VPN tunnels is by encapsulating a network protocol (including IPX, NetBEUI, AppleTalk, and others) inside the PPP, and then encapsulating the entire package inside a tunneling protocol, which is typically IP, but could also be ATM or frame relay. This increasingly popular approach is called Layer 2 tunneling, because the passenger is a Layer-2 Tunneling Protocol (L2TP).

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