For a list of commonly used VPN related terms and descriptions, please visit the Virtual Private Network Consortium's terms page.

As the VPN market evolves and expands, the differences between various classifications and architectures become somewhat blurred. Features that were historically available only through software or firewall-based solutions are now offered by hardware vendors, while stand-alone applications might offer to improve performance by supporting encrypting routers. Newer developments such as IPsec provide a standard to create custom solutions.

There are basically three types of VPN:

INTRANET: this type of VPN is usually implemented for commonly structured networks that may span various physical locations. An example would be a network that exists in several buildings connected to a data center or mainframe that has secure access through private lines. These may need strong encryption and strict performance and bandwidth requirements.

REMOTE ACCESS: Initiated by remote users to connect to their corporate LAN such as employees and telecommuters equipped with laptops that will connect intermittently from many different locations.

EXTRANET: This type of VPN uses the Internet as its base and deals with a wider scale of users and locations to allow customers and branch offices to access corporate resources across various network types.

The most common reasons to use a VPN are:

• Reduce the costs of telecommunications (especially long distance phone charges) by using the Internet to carry traffic
  
  
• Reduce telecommunications costs by minimizing the number of lines accessing a corporate site
  
  
• Save operating expenses by contracting VPN management and equipment costs to a service provider

Long distance charges can be reduced with a VPN because users are placing local calls to their ISPs instead of making long distance calls to the company.

The number of access lines and their costs are reduced because many companies pay monthly charges for both high-speed Internet access links and frame relay, ISDN Primary Rate Interface or T1 lines to carry data. If the VPN allows data traffic over the company's Internet access lines, the number of installed lines needed is reduced.

Operational costs are additionally reduced by outsourcing remote access to an ISP or other type of service provider because by giving users access to the network via a VPN, modem pools and remote access servers can be eliminated. The operational cost savings come from not having to manage those devices.