I have a Windows Server 2008 that has a single network interface configured with a public IP address. My business partner has a private network. From my server, I need to access all the devices on his private network, and those devices must be able to access my server.

My business partner has a standard solution for these requirements. They will setup an IPSec + GRE tunnel to my server. They told me, that I will need an additional public IP address for this to work. If it really is necessary, there is no problem, I can get an additional public IP address, although it will be assigned to the same physical network interface.

I assume that on my server I will have both public IP addresses and also the private IP address from the tunnel (the same that is visible for the devices inside the private network).

What alternatives do I have?

1. Is it possible to configure this tunnel on my Windows Server 2008? Can it be done using only Windows tools, or do I need an additional free / commercial VPN software?
2. If it cannot be done directly on Windows, can I setup an additional virtual machine running Linux, that will handle the IPSec + GRE tasks? How to do it?
3. If it cannot be done on a virtual linux box, will I have to buy and setup a Cisco router to handle the IPSec + GRE tasks?

Thanks for your opinions. I'm watching this question to clarify any issues or questions.