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What Is VPN?

Applies To: Windows Server 2008

Virtual private networks (VPNs) are point-to-point connections across a private or public network, such as the Internet. A VPN client uses special TCP/IP-based protocols, called tunneling protocols, to make a virtual call to a virtual port on a VPN server. In a typical VPN deployment, a client initiates a virtual point-to-point connection to a remote access server over the Internet. The remote access server answers the call, authenticates the caller, and transfers data between the VPN client and the organization’s private network.

To emulate a point-to-point link, data is encapsulated, or wrapped, with a header. The header provides routing information that enables the data to traverse the shared or public network to reach its endpoint. To emulate a private link, the data being sent is encrypted for confidentiality. Packets that are intercepted on the shared or public network are indecipherable without the encryption keys. The link in which the private data is encapsulated and encrypted is known as a VPN connection.

A VPN Connection

There are two types of VPN connections:

  • Remote access VPN

  • Site-to-site VPN

Remote access VPN

Remote access VPN connections enable users working at home or on the road to access a server on a private network using the infrastructure provided by a public network, such as the Internet. From the user’s perspective, the VPN is a point-to-point connection between the computer (the VPN client) and an organization’s server. The exact infrastructure of the shared or public network is irrelevant because it appears logically as if the data is sent over a dedicated private link.

Site-to-site VPN

Site-to-site VPN connections (also known as router-to-router VPN connections) enable organizations to have routed connections between separate offices or with other organizations over a public network while helping to maintain secure communications. A routed VPN connection across the Internet logically operates as a dedicated wide area network (WAN) link. When networks are connected over the Internet, as shown in the following figure, a router forwards packets to another router across a VPN connection. To the routers, the VPN connection operates as a data-link layer link.

A site-to-site VPN connection connects two portions of a private network. The VPN server provides a routed connection to the network to which the VPN server is attached. The calling router (the VPN client) authenticates itself to the answering router (the VPN server), and, for mutual authentication, the answering router authenticates itself to the calling router. In a site-to site VPN connection, the packets sent from either router across the VPN connection typically do not originate at the routers.

VPN Connecting Two Remote Sites Across the Internet

Properties of VPN connections

VPN connections that use PPTP, L2TP/IPsec, and SSTP have the following properties:

  • Encapsulation

  • Authentication

  • Data encryption


With VPN technology, private data is encapsulated with a header that contains routing information that allows the data to traverse the transit network. For examples of encapsulation, see VPN Tunneling Protocols.


Authentication for VPN connections takes three different forms:

  1. User-level authentication by using PPP authentication

    To establish the VPN connection, the VPN server authenticates the VPN client that is attempting the connection by using a Point-to-Point Protocol (PPP) user-level authentication method and verifies that the VPN client has the appropriate authorization. If mutual authentication is used, the VPN client also authenticates the VPN server, which provides protection against computers that are masquerading as VPN servers.

  2. Computer-level authentication by using Internet Key Exchange (IKE)

    To establish an Internet Protocol security (IPsec) security association, the VPN client and the VPN server use the IKE protocol to exchange either computer certificates or a preshared key. In either case, the VPN client and server authenticate each other at the computer level. Computer certificate authentication is highly recommended because it is a much stronger authentication method. Computer-level authentication is only performed for L2TP/IPsec connections.

  3. Data origin authentication and data integrity

    To verify that the data sent on the VPN connection originated at the other end of the connection and was not modified in transit, the data contains a cryptographic checksum based on an encryption key known only to the sender and the receiver. Data origin authentication and data integrity are only available for L2TP/IPsec connections.

Data encryption

To ensure confidentiality of the data as it traverses the shared or public transit network, the data is encrypted by the sender and decrypted by the receiver. The encryption and decryption processes depend on both the sender and the receiver using a common encryption key.

Intercepted packets sent along the VPN connection in the transit network are unintelligible to anyone who does not have the common encryption key. The length of the encryption key is an important security parameter. You can use computational techniques to determine the encryption key. However, such techniques require more computing power and computational time as the encryption keys get larger. Therefore, it is important to use the largest possible key size to ensure data confidentiality.