Internet & Networking

MPLS

Also known as: MPLS VPN, L3 VPN, Label Switching, MPLS TE, Segment Routing

MPLS (Multiprotocol Label Switching) is a technique used in enterprise WANs and carrier networks to route traffic along pre-defined paths using short label identifiers rather than full IP lookups at each hop.

This enables predictable performance, QoS control, and the ability to create private virtual networks (MPLS VPNs) over shared carrier infrastructure.

MPLS, explained at three levels

At home

MPLS is a way of routing network traffic along predetermined paths through a carrier's network. Instead of each router deciding where to send a packet based on the full IP address, MPLS attaches a small 'label' at entry and routes by that label: faster and more predictable.

At work

Many large enterprises use MPLS to connect their offices over a private carrier network. Unlike internet VPNs, MPLS provides guaranteed bandwidth and latency between sites: important for voice calls and video conferencing that degrade with unpredictable internet performance.

Real-world examples

At home

Thomas's company has MPLS connections between their five offices. Video conferencing between offices uses the MPLS path (guaranteed 10ms latency) rather than the internet: voice quality is consistently excellent.

At work

Lena's company is evaluating replacing their $15,000/month MPLS WAN with SD-WAN over broadband internet at $4,000/month. The SD-WAN vendor proposes application-aware routing that prioritizes Cisco Webex and SAP over best-effort paths, maintaining quality at lower cost.

Common confusions

  • MPLS is just like a VPN — MPLS provides private Layer 3 VPN functionality, but without end-to-end encryption by default. Traditional VPNs encrypt traffic over the internet. MPLS relies on the carrier's infrastructure isolation for privacy. Adding encryption over MPLS is possible but is an additional layer.
  • SD-WAN completely replaces MPLS — SD-WAN has displaced MPLS for many use cases, but carriers still use MPLS in their backbone, and some latency-sensitive applications (real-time control systems, trading) still benefit from MPLS's deterministic behaviour. Hybrid deployments are common.

For analysts

MPLS costs are a significant line item in enterprise IT budgets. BAs involved in network infrastructure decisions or vendor evaluations should understand the MPLS-to-SD-WAN migration business case: often a 30-60% network cost reduction opportunity.

History & origin

MPLS was standardized by the IETF in 2001, building on proprietary predecessors from Cisco (Tag Switching), IBM (ARIS), and others. It was designed to bring ATM's traffic engineering capabilities to IP networks. MPLS became the dominant enterprise WAN technology through the 2000s and 2010s, used by carriers to provide dedicated L3 VPN services to enterprise customers. SD-WAN has been displacing MPLS for branch connectivity since the mid-2010s, though MPLS remains important in carrier core networks and for latency-sensitive applications.