The Role of VPN in SaaS Implementation

Virtual Private Networking (VPN) has become one of the most important technologies in the recent years, primarily owing to concerns for privacy and accessibility. However, the role of VPN has increased in the case of Software as a Service (SaaS) application’s implementation as well. Since VPN facilitates access control features, it allows for enhanced data security in SaaS applications. 

Only certain allowed users can access data via a secure encrypted virtual tunnel, making it secure and compliant to the regulatory requirements. Other aspects like multi-factor authentication and endpoint system compliance scanning also ensure that devices connecting to the VPN meet the necessary security standards. 

The following guide explains different types of compliance and regulatory requirements that can be ensured with the help of a VPN for SaaS.

Compliance and Regulatory Requirements in SaaS

Before we move on, it is essential to understand what are few of the most common SaaS compliance standards and why it is important to follow them. 

Case Example

Take the example of Zoom, a video conferencing SaaS application that allows virtual group meetings and individual meetings. Zoom is used in several sectors including education, health, business, and even government sectors. Considering the hypothetical situation that Zoom was not following any regulatory requirements, it would have been able to:

  • Transmit sensitive data of patients, including videos and images, to elsewhere
  • Transmit student records, exam papers, important documents, to a third-party where it could be potentially misused.
  • Transmit credit card information of people who have signed up for the paid version of the program.
  • Use, store, or transmit important and confidential information of the government elsewhere. 

With such issues in mind, it becomes clear as to why compliance and regulatory requirements are essential. 

Currently, Zoom and many other video conferencing SaaS applications are being managed under different regulator requirements which includes:

  • Family Educational Rights and Privacy Act (FERPA): Under this requirement, it is the responsibility of Zoom to maintain the privacy and security of student data during virtual learning sessions.
  • Health Insurance Portability and Accountability Act (HIPAA): Compliance with regulations such as HIPAA is vital to protect patient privacy and ensure the secure transmission of healthcare data. Ultimately, patients and healthcare providers can have safe one-on-one sessions without any loss of privacy. 
  • Federal Information Security Management Act (FISMA): This act is in place to make sure that government agencies are having secured and protected calls over Zoom’s server. It implies that Zoom is implementing security controls and obtaining the necessary certifications and attestations, enabling government agencies to use Zoom for secure and compliant communications.

What Will Happen if Compliance Requirements are Not Followed?

In the case where a company chooses to not opt for compliance requirements, it might not be allowed to operate in the first place. However, once a firm fulfills the necessary compliance requirements, and later fails to abide by them, it can face several repercussions including:

  • Legal Penalties and/or Fines: Companies found to be involved in misconduct of compliance requirements can face legal penalties and fines imposed by regulatory authorities. For example, under the General Data Protection Regulation (GDPR), fines can reach up to €20 million or 4% of global annual turnover, whichever is higher.
  • Lawsuits: A bigger consequence if compliance requirements are not followed is that a company can face major lawsuits, which can even lead to shut down of operations. For example, in 2017, Equifax experienced a massive data breach that exposed the personal information of over 147 million consumers. As a result, Equifax faced numerous lawsuits from affected individuals, consumer advocacy groups, and government entities. After a lengthy lawsuit, Equifax came upon a settlement amount of $700 million in fines and restitution to affected consumers. 

To avoid these problems, a company should ensure that compliance requirements are met and SaaS Company is accounting for revenue as well.

Understanding VPN

A Virtual Private Network (VPN) is a robust technology designed to enhance privacy, security, and accessibility in network communications. This is achieved by utilizing encryption and tunneling protocols that help in creating a secure and private connection over an otherwise untrusted or public network. It achieves this by encapsulating data packets within encrypted tunnels, ensuring confidentiality and integrity during transmission.

VPNs make privacy better by establishing a secure and private communication channel between two endpoints. Ultimately, it allows businesses as well as individual users to securely access resources, SaaS applications, share sensitive information, and conduct online activities without compromising their data privacy or risking unauthorized access.

Types of VPN

There are several types of VPNs, but the four most commonly used VPN technologies in an organizational context include the following. 

Remote Access VPN

A remote access VPN works by providing secure and encrypted access to the internal network resources for remote employees or authorized individuals outside the organization’s physical network. In modern times, when the culture of work-from-home is has become more popular than ever, the remote access VPN makes it safe to work “remotely” from anywhere. For example, a remote access VPN allows sales representatives to securely access important resources, such as customer relationship management systems (CRM) through a VPN from anywhere around the world.

Site-to-Site VPN

Site-to-Site VPN is referred to as a virtual private network that allows multiple remote networks to securely connect with each other over the internet. It enables seamless and encrypted communication between geographically distributed locations or networks as if they were part of the same private network. For example, Emirates airline would use a VPN to establish secure and private connection between its offices located in different countries.


SSL/TLS VPN is an advanced stage VPN and abbreviation for Secure Sockets Layer/Transport Layer Security VPN. This VPN utilizes the SSL/TLS protocol to establish secure and encrypted connections for remote access to network resources. It leverages the same encryption technology used to secure web traffic (HTTPS) to provide secure communication between remote users and the internal network. 

One common example of this is banking systems and applications. When customers access the online banking platform from their web browsers or mobile applications, the SSL/TLS VPN establishes an encrypted connection between the customer’s device and the bank’s server. This ensures that the customer’s login credentials, account information, and transaction details are securely transmitted over the internet.

Intranet VPN

Intranet VPN allows secure and private communication within an organization’s internal network. It is designed to connect different devices, systems, or networks within a single organization, enabling secure data transmission and remote access to internal resources. This is achieved by implementing encryption protocols and authentication mechanisms to establish secure connections and maintain the confidentiality and integrity of data.

Quick Fact: PPTP VPN (Point-to-Point Tunneling Protocol) was one of the earliest type of VPNs. However, due to security concerns and loopholes, it is no longer used (and only used because of compatibility issues).

How VPN Helps in Ensuring Compliance Requirements in SaaS Implementation?

How VPN Helps in Ensuring Compliance Requirements in SaaS Implementation?

VPN plays a key role in making sure that regulatory requirements are being met by a SaaS application in the following ways. 

Secure Data Transmission

Without using a VPN, data transmission is generally less secure and might get compromised, especially over public networks. When data is transmitted over a VPN, it is encrypted, which means it is converted into an unreadable format using cryptographic algorithms. Only those that have special permissions regarding access to the data are granted access. The encrypted data remains protected throughout its journey over the internet, safeguarding it from interception by potential eavesdroppers or attackers. Besides, the risk of unauthorized access is also mitigated as VPNs allow businesses to implement access control mechanisms to restrict access to SaaS applications. 

For example, if a person A from the sales department uploaded a file to be accessed by person B from the finance department, only these two people will be able to access it. The file is encrypted during transmission. Unauthorized personnel such as someone from the human resources department will not be able to access it. Even if someone bypasses the security, they will only be able to extrapolate the encrypted file which takes major computing power and a really long time to crack. 

Following secure data transmission enable businesses to abide regulations set for different industries, including the Federal Information Security Management Act (FISMA), Health Insurance Portability and Accountability Act (HIPAA), Personal Information Protection and Electronic Documents Act (PIPEDA), and General Data Protection Regulation (GDPR).

Protecting Data Privacy and Confidentiality

When a user connects to a VPN network, their device’s IP address is replaced with the IP address of the VPN server or proxy server. This substitution of IP addresses helps protect the user’s privacy and adds an additional layer of anonymity, which is commonly referred to as IP address masking. 

How exactly does that help? Mainly, since the user’s real IP address is hidden, a greater level of confidentiality is achieved. Other than that, masking IP addresses also allows access to different resources that are geographically restricted. For example, if the use of a certain service is banned, such as YouTube in China, an organization can use a VPN network to show as if they are accessing YouTube from France, when really they are in China. 

Moreover, a VPN establishes a secure and encrypted tunnel between the user’s device and the SaaS application server. This tunnel helps in potential interception or monitoring by unauthorized parties. It acts as a protective layer that prevents eavesdropping on the communication channel. Masking IP addresses and using a secure and encrypted terminal also helps in meeting certain regulatory requirements. 

Facilitating Secure Remote Access

Facilitating secure remote access means that applications can be accessed remotely from a different location than the actual location. This is made possible with VPNs which allow you to connect to a specific IP address and access a SaaS platform securely. For example, employees can work from their home by using a dedicated Virtual IP address to access their office network. 

To make it secure, authorization mechanisms like credentials, such as usernames, passwords, or other authentication factors are put to action. Moreover, the network is thoroughly managed to detect and respond to potential security threats or anomalies.

Enforcing Access Controls and User Permissions

VPNs can help in enforcing access controls and specific user permissions. This means that only relevant parties have specific access and not just everyone within an organization. One way to do so is by creating Access Control Lists (ACLs). ACLs define rules and criteria that determine which users or groups are allowed or denied access to certain resources or network segments.

Apart from that, network segmentation can also be configured to ensure access control. This segmentation helps enforce access controls by isolating different user groups or departments and limiting their access to specific network resources. Moreover, multiple user-based policies are issued, which ensure that users are granted appropriate permissions and access rights based on their assigned roles and responsibilities.

Logging and Auditing Capabilities

Logging and Auditing capabilities refer to managing records and maintaining them with full integrity, so that they can be audited later. By establishing a VPN connection, user traffic passes through the VPN server, which can log information such as source IP addresses, destination IP addresses, timestamps, data volume and other parameters. This logging allows organizations to track user activities and identify any suspicious or unauthorized behavior. 

Other than that, VPNs can assist in meeting compliance requirements by providing detailed logs and records of user activities. VPN logs can serve as evidence to demonstrate adherence to security policies, data protection regulations, and industry-specific compliance standards. Therefore, it becomes easier for companies using VPNs to prove that they are following compliance standards.


VPNs have become important tools for securing remote access and protecting sensitive data in SaaS applications, which helps in ensuring that the compliance and regulatory requirements are appropriately met. There are numerous types of VPN used in organizations including remote access VPN, site-to-site VPN, or SSL/TLS VPN. These technologies play a vital role in safeguarding data privacy and enabling secure transmission in popular SaaS applications. However, organizations need to implement centralized logging mechanisms, set appropriate log retention periods, and ensure that the collected logs are protected and accessible for audit purposes, enabling them to manage compliance standards in a better way.