Cybercrime costs American companies over $525 million each year, and the problem is growing rapidly. Using a VPN is one of the most effective steps businesses can take to secure their digital assets. This guide answers the question, "What is a VPN?," explains why virtual private network use is on the rise, and describes the pros and cons of using a VPN.

What is a VPN, and How Does it Work?

A virtual private network, better known as a VPN, is a dedicated digital network that connects to a dedicated, secure server.

VPNs create an encrypted tunnel between your devices and the VPN service, and all of your online traffic is routed through this tunnel. This virtual 'tunnel' creates a barrier between your data and cybercriminals who seek to reroute your data, steal your information, and sabotage your company.

Using a VPN is easy. Simply sign up with a VPN service, download the company's app, and enter the username and password used to enroll in the service. Once users are logged in, the VPN app will either automatically connect to the nearest server, or prompt users to select their preferred location. In general, the further the server is from the user, the slower the data transmission rates will be.

What is a VPN Connection?

VPNs are comprised of multiple servers located across the world. When a VPN user connects a device to a virtual private network, all online traffic traveling to and from that device is automatically encrypted.

Additionally, the user can often choose from a number of server locations. This feature lets users mask their actual physical location by assigning an internet protocol address, or IP address, based on the location of the server. This feature allows VPN users to bypass geo-blocking tools on websites that restrict visitors from certain countries, making VPNs a popular workaround for everything from streaming online videos to evading government censorship of websites.

What is a VPN Used For?

In commercial settings, VPNs are primary used to add an extra layer of security against cybercriminals. VPNs are also used to create secure connections between remote workers and local business networks.

Virtual private networks are also widely used in educational settings and by individuals who want to hide their browsing activity from their internet service provider. VPNs can also be used to create a secure online connection when using public Wi-Fi hotspots, which often lack basic security measures.

And since VPN users can select the location of the server used to route their online traffic, VPNs are widely used to unblock geo-restricted websites such as streaming services and censored websites.

Virtual Private Network Pros and Cons

As with all digital services, there are many pros and cons to using a VPN. The pros include:

  • All online traffic transmitted through the VPN is encrypted
  • A low-cost way to navigate around geo-restrictions on websites
  • Reduces the risk of hackers accessing digital assets
  • Creates a secure connection between local area networks and remote users

Cons of virtual private networks include:

  • Slower data transmission speeds
  • A false sense of online security
  • VPN services can monitor client activity and access encrypted data

To further answer the question, "What is a VPN?" and find out whether or not a VPN is right for your business, contact us here at 8x8, where we create comprehensive global solutions to keep people connected worldwide.