What is MPLS, and why isn't it dead yet?

Multi-protocol label switching is reliable but expensive, leading enterprises to supplement it with cheaper and more flexible SD-WAN.

MPLS explained
Getty Images

Did you ever order something online from a distant retailer and then track the package as it makes strange and seemingly illogical stops all over the country?

That’s similar to the way IP routing on the Internet works. When an internet router receives an IP packet, that packet carries no information beyond a destination IP address. There is no instruction on how that packet should get to its destination or how it should be treated along the way.

Each router has to make an independent forwarding decision for each packet based solely on the packet’s network-layer header. Thus, every time a packet arrives at a router, the router has to “think through” where to send the packet next. The router does this by referring to complex routing tables.

The process is repeated at each hop along the route until the packet eventually reaches its destination. All of those hops and all of those individual routing decisions result in poor performance for time-sensitive applications like videoconferencing or voice over IP (VoIP).

What is MPLS

Multi-protocol label switching (MPLS), is a tried and true networking technology that has powered enterprise networks for over two decades. Unlike other network protocols that route traffic based on source and destination address, MPLS routes traffic based on predetermined “labels”. 

Businesses use MPLS to connect remote branch offices that require access to data or applications that reside in the organization's data center or company headquarters.

How MPLS works

With MPLS, the first time a packet enters the network, it’s assigned to a specific forwarding class of service (CoS)—also known as a forwarding equivalence class (FEC)--indicated by appending a short bit sequence (the label) to the packet. These classes are often indicative of the type of traffic they carry. For example, a business might label the classes real time (voice and video), mission critical (CRM, vertical app), and best effort (Internet, email). Each application would be placed in one of these classes.

The fastest, low-latency path would be reserved for real-time apps like voice and video, thereby ensuring that quality is high. Separating traffic based on performance is impossible to do with other routing protocols.

The key architectural point is that the labels provide a way to attach additional information to each packet above and beyond what the routers previously had to work with.

Is MPLS Layer 2 or Layer 3?

There’s been some confusion about whether MPLS is a Layer 2 or Layer 3 service. But MPLS doesn’t fit neatly into the OSI seven-layer hierarchy, and is sometimes classified as Layer 2.5. In fact, one of the key benefits of MPLS is that it separates forwarding mechanisms from the underlying data-link service. In other words, MPLS can be used to create forwarding tables for any underlying protocol.

Specifically, MPLS routers establish a label-switched path (LSP), a pre-determined path to route traffic in an MPLS network, based on the criteria in the FEC. It is only after an LSP has been established that MPLS forwarding can occur. LSPs are unidirectional, which means that return traffic is sent over a different LSP.

When an end user sends traffic into the MPLS network, an MPLS label is added by an ingress MPLS router that sits on the network edge. The MPLS Label consists of four sub-parts:

  1. The Label

The label holds all of the information for MPLS routers to determine where the packet should be forwarded.

  1. Experimental

Experimental bits are used for Quality of Service (QoS) to set the priority that the labeled packet should have.

  1. Bottom-of-Stack

The Bottom-of-Stack tells MPLS routers if they are the last leg of the journey and there are no more labels to be concerned with.  This usually means the router is an egress router.

  1. Time-To-Live

This identifies how many hops the packet can make before it is discarded.

MPLS pros and cons

The benefits of MPLS are scalability, performance, better bandwidth utilization, reduced network congestion and a better end-user experience.

MPLS itself does not provide encryption, but it is a virtual private network and, as such, is partitioned off from the public Internet. Therefore, MPLS is considered a secure transport mode. And it is not vulnerable to denial-of-service attacks, which might impact pure-IP-based networks.

On the negative side, an MPLS connection is much more expensive than a standard internet connection. In addition, MPLS was designed for organizations that have multiple remote branch offices that are geographically dispersed across the country or the world where the majority of traffic is backhauled to enterprise data centers. Today, businesses have re-directed much of their traffic so it’s going to and from cloud providers instead, making MPLS suboptimal.

MPLS networks and the cloud

Once businesses transition to the cloud, the MPLS-based hub-and spoke model becomes inefficient because it routes traffic through corporate headquarters (hubs), which act as central choke points. It is more efficient to send traffic directly to the cloud. Also, the increased use of cloud services, video and mobile apps has driven up bandwidth requirements, and MPLS services are difficult to scale on demand.

MPLS was a great innovation for its time, but there are newer technologies that better address today’s network architectures. Software-defined WANs (SD-WAN) is architected with cloud connectivity in mind, which is why so many businesses have been replacing or augmenting their MPLS networks with SD-WAN.


SD-WAN is the application of Software Defined Networking (SDN) concepts to the WAN. This means the deployment of SD-WAN edge devices that apply rules and policies to send traffic along the best path.

SD-WAN is a transport-agnostic overlay that can route any type of traffic, including MPLS. The advantage of SD-WAN is that an enterprise WAN-traffic architect can sit at a central point and easily apply policies across all WAN devices.

By contrast, with MPLS, predetermined routes need to be painstakingly provisioned and once the fixed circuits are up, making changes is not point-and-click.

But once an MPLS network is deployed, it delivers guaranteed performance for real-time traffic. SD-WAN can route traffic along the most efficient path, but once those IP packets hit the open Internet, there are no performance guarantees.

SD-WAN is significantly less expensive to deploy and operate than MPLS. Lightyear's WAN connectivity pricing guide pegs the average monthly recurring cost of 100 Mbps MPLS connection at $1,277, where as SD-WAN at similar speeds only costs $300 per month on average.   

Is MPLS dead?

Many network professionals look at MPLS and SD-WAN as an either-or proposition. There's strong momentum behind SD-WANs, and it's coming at MPLS's expense. MPLS usage dropped 24% from 2019 to 2020; in that same time period, the number of enterprises using some form of SD-WAN spiked from 18% to 43%, and interest was further driven by the need to connect datacenters to home workers during the COVID-19 pandemic.

So is SD-WAN inevitably going to kill MPLS? Network World's Zeuz Kerravala says the two technologies can coexist, with MPLS's role changing. Small and mid-size businesses can likely sunset MPLS and shift solely to an all-broadband WAN because many of them have moved to an all-cloud IT model.

Larger enterprises, which may have sunk costs into MPLS networking, will likely take a hybrid approach, where they will keep MPLS for legacy apps that run on-net and then offload Internet traffic, like cloud, to the SD-WAN. Businesses already have hybrid compute, storage, and applications, so hybrid WAN networks won't be anything too strange.

MPLS will continue to have a role connecting specific point-to-point locations, like large regional offices, retail facilities with point-of-sale systems, regional manufacturing facilities, and multiple data centers. MPLS is well suited for real-time applications like telepresence. And as Verizon (an MPLS provider, admittedly) points out, SD-WAN can actually help you get the most out of your MPLS connection. After all, SD-WAN's promise is that it dynamically routes network traffic in the most efficient way possible to meet your quality of service requirements for various applications, and it can certainly use your MPLS connection to do so.

In the end, enterprise WAN architects need to make a risk/reward calculation between the reliable but expensive performance of MPLS vs. the cheaper but less reliable performance of the Internet. Improvements in other networking technologies and protocols have made internet traffic more reliable, but for some there will always be a place for the ultra-high-reliability of MPLS. Nobody wants to get caught in the cross-hairs when the CEO’s monthly videoconference with branch office employees drops off mid-sentence, after all.

Copyright © 2022 IDG Communications, Inc.

The 10 most powerful companies in enterprise networking 2022