This paper analyses the problem of bandwidth management for the Internet in
the environment of virtual private networks (VPNs). A VPN is a private net
work constructed within a public network infrastructure. In recent years, e
specially with the growing interest in electronic commerce, VPNs have exper
ienced a dramatic growth. A large amount of work is being done on the impro
vement of the performance of VPNs, mainly concerning their security. Much l
ess attention has been given to the resource management issues. Resource ma
nagement should be simple to implement and optimally designed to maximise t
he network performance. We analyse partitioning of network resources, prima
rily bandwidth, in order to isolate the communication of families of users
and at the same time maximise the performance. This work is based on the dy
namic bandwidth partitioning scheme, which has been described previously(8,
9). The main feature of this scheme is that it is user-oriented; the bandwi
dth is allocated in a way that maximises the users' utility. We extend the
analysis of the scheme in this paper, by presenting the motivation for hier
archical dynamic bandwidth partitioning, which addresses dynamic bandwidth
allocation in the VPN environment.