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.
At home
MPLS labels are 32-bit values prepended to packets at the network edge (Label Edge Router, LER). Interior routers (Label Switching Routers, LSR) forward based on labels, not IP addresses, using pre-built Label Switched Paths (LSPs). Labels are swapped at each hop. Traffic Engineering (TE) pre-computes optimal paths to avoid congestion, unlike standard IP routing.
At work
MPLS L3 VPN (RFC 4364) creates isolated virtual routing tables per customer on shared carrier infrastructure. Branch offices appear to be on the same private network, with addresses that don't conflict with other customers. QoS differentiation (EXP bits in the MPLS header) enables carriers to prioritize voice, video, and data traffic differently across the same infrastructure.
At home
MPLS label stack allows label stacking for hierarchical forwarding. LDP (Label Distribution Protocol) and RSVP-TE (Resource Reservation Protocol, Traffic Engineering) are the main signalling protocols for distributing labels. Segment Routing (SR-MPLS) simplifies MPLS by encoding the path as a stack of segment identifiers, eliminating per-flow state in the network core.
At work
MPLS VPN versus SD-WAN trade-offs: MPLS provides guaranteed SLA with carrier responsibility; SD-WAN uses commodity internet with application-aware routing and encryption, typically at 40-60% lower cost. Many enterprises run hybrid architectures: MPLS for real-time traffic (voice, video, SAP) and SD-WAN over broadband for cloud-bound and less-sensitive traffic. Carriers now offer SD-WAN services using MPLS as the high-quality underlying transport.
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.