Meet the Next Generation Virtual Private Network

Cognizant of the heightened concern for network security, scores of high-tech firms have spent the past year bolstering their
virtual private network (VPN) offerings. Just ask Cisco, 3Com and Nokia, to name a few.

Internet visionary Jim Clark, credited with forging the likes of Silicon Graphics, Netscape Communications, myCFO and
Healtheon/WebMD since the Web went commercial, is seeking to go further than those notable firms with his new Sunnyvale,
Calif.-based startup, Neoteris, which was unveiled Monday. With it, Clark is trumpeting
“revolutionary” VPN technology called the Instant Virtual Extranet (IVE).

Neoteris was forged from the idea that current VPN solutions are just not finding purchase in the enterprise because of
implementation costs, security risks and support issues. The main problem, Clark and Co. maintain, is that while VPNs do create a
secure tunnel between two endpoints, it requires the deployment of client software or hardware, does not secure the content in the
tunnel and leaves an open network connection into a company’s LAN. This in turn begets a major snafu for businesses in that they
must provide administration, and sometimes even personal firewalls for every user. This gets expensive and is a drain on network

What Neoteris’ Instant Virtual Extranet appliances purport to do, is capture the value of first-run VPN and extranet technologies,
while eliminating many of the security dilemmas and administrative expenses inherent in them. Specifically, the Neoteris
EmployeeAccess and PartnerAccess product families provide secure access to corporate resources from one Web browser without any
changes or customization of existing network resources. This results in access deployment to multiple users.

The new technology drew praise from one Yankee Group analyst, who said that in addition to proving quite costly for companies, that
remote access solutions have taken as long as a year to roll out.

“Tack on annual maintenance fees and such solutions become a very expensive proposition, before even addressing major security and
scalability concerns,” said Zeus Kerravala, director of E-Networks and Broadband Access of The Yankee Group. “Neoteris has developed
appliances to address these issues and also demonstrate the potential to change the way that companies effectively conduct

One analyst wasn’t so excited. Jason Smolek, an analyst with IDC’s IP VPNs research program who became familiar with the company when it was in stealth mode more than a year ago, said Neoteris will definitely have a market as far secure remote access goes.

“What they’re doing is building SSL server boxes; it’s application layer security. They’ll say that’s all you need for finance institutions and banks, but businesses that have an installed VPN base may not be willing to go for [them],” Smolek said.

He said many businesses want a combination of VPN solutions, including software and hardware for robust security.

“Not all VPN appliances are Web-enabled [which is what Neoteris offers, through a browser],” Smolek explained. “Where Neoteris has a market is in remote access.”

Neoteris’ products have won endorsements from tech firms, such as home networking specialist 3Com, which
claimed that Neoteris’ EmployeeAccess product solved connectivity problems that the firm could not otherwise easily solve.

Neoteris, which received $5 million in funding from Jim Clark and The Barksdale Group, is headed by Chief Executive Officer Krishna
“Kittu” Kolluri, former co-founder and senior vice president of WebMD Corp. Clark serves as chairman of the company board. As for
the rest of the cast, it reads as a veritable “who’s who” of former Healtheon employees, including co-founders Theron Tock, chief
technology officer, Shyam Davuluru, director of engineering, Surya Koneru, principal engineer.

But Clark, who has made a name for himself with his prescience for forging three multi-billion dollar firms (SGI, Netscape and
Healtheon/WebMD), is clearly the biggest draw analysts will look to. To be sure, despite the sector’s current time-to-implement and
cost snags, IDC Corp. said the VPN market is set to explode, with services driving VPN equipment sales to the $7.5 billion mark by

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