Enterprise networks have always needed efficient, reliable, and predictable ways to move traffic between sites. Before the rise of software-defined overlays and cloud-first connectivity, Multiprotocol Label Switching (MPLS) was the gold standard for wide area networks (WANs).
Even as organizations transition toward SD-WAN, SASE, and cloud-native solutions, MPLS remains relevant in certain scenarios due to its quality-of-service guarantees and predictable performance. Understanding what MPLS is — and where it fits in modern architectures — is essential for IT leaders evaluating their networking strategy.
What Is MPLS?
Multiprotocol Label Switching (MPLS) is a data-carrying technique for high-performance telecommunications networks. Rather than routing traffic purely based on long IP addresses, MPLS assigns a short label to packets. This label directs packets along predetermined, efficient paths through the network.
The result is a connection-oriented approach within otherwise connectionless IP networks, allowing for predictable performance, reduced latency, and better traffic engineering.
In short, MPLS ensures that mission-critical applications — such as voice, video conferencing, or ERP systems — receive the bandwidth and reliability they require.
How MPLS Works
- Packet Labeling: When a packet enters an MPLS-enabled network, it is assigned a short “label.”
- Label Switching: Routers, called Label Switch Routers (LSRs), forward packets based on labels rather than IP headers.
- Label-Switched Paths (LSPs): Predefined paths optimize traffic flow, ensuring efficient and predictable routing.
- Traffic Engineering: MPLS allows administrators to define priorities for certain traffic types, allocating bandwidth to mission-critical applications.
- Protocol-Agnostic: MPLS can carry multiple protocols (IP, Ethernet, ATM, Frame Relay), making it versatile across different infrastructures.
Benefits of MPLS
1. Performance Guarantees
MPLS supports Service Level Agreements (SLAs) with assured bandwidth, latency, and jitter performance.
2. Quality of Service (QoS)
Traffic classes prioritize real-time applications like VoIP or video over less critical data transfers.
3. Reliability
MPLS offers predictable performance and resilience compared to traditional internet-based routing.
4. Scalability
Supports enterprise growth by efficiently routing traffic across large WANs.
5. Flexibility
Works with multiple underlying transport technologies, making it adaptable to diverse network infrastructures.
Challenges and Limitations
- High Cost: MPLS circuits are significantly more expensive than broadband or DIA links.
- Provisioning Time: Ordering and deploying new MPLS circuits can take weeks or months.
- Cloud Inefficiency: MPLS was designed for site-to-site traffic, not cloud-first applications, leading to backhaul inefficiencies.
- Vendor Lock-In: Enterprises often rely on a single carrier’s MPLS backbone.
- Limited Agility: Rapid scaling for remote work or hybrid environments is challenging.
Real-World Applications
- Financial Services: MPLS supports low-latency trading platforms where performance is non-negotiable.
- Healthcare: Secure, predictable connectivity for electronic health records and telemedicine.
- Retail: Branch connectivity for point-of-sale and inventory systems.
- Manufacturing: Connecting global plants and data centers for supply chain efficiency.
- Government: Secure and resilient interagency communication.
MPLS vs. Alternatives
- MPLS vs. Internet VPNs: VPNs over the internet are cheaper but lack MPLS’s guaranteed performance.
- MPLS vs. SD-WAN: SD-WAN, as discussed in Four Questions You Should Ask a Potential SD-WAN Provider, provides agility and cost efficiency by dynamically routing traffic across multiple link types.
- MPLS vs. SASE: SASE integrates SD-WAN and cloud security, addressing hybrid work and cloud adoption needs — scenarios where MPLS struggles. See SD-WAN & WFH: Security Risks, Operational Lift, Inefficiency for details.
- MPLS vs. Multi-Cloud Connectivity: MPLS backhauls cloud traffic, while SD-WAN and Cloud Connect solutions better support SaaS and IaaS environments. How Multi-Cloud Environments Are Supported by SD-WAN highlights this shift.
- MPLS vs. Wavelength Services: Wavelength offers high-capacity optical transport, making it attractive for data-intensive workloads.
- MPLS vs. Hybrid WAN: Many enterprises combine MPLS and internet links for balanced cost and performance, as explored in How Hybrid Work With UCaaS and SD-WAN is Implemented.
Industry Trends and Future Outlook
- Declining MPLS Spend: Enterprises are gradually reducing MPLS reliance in favor of SD-WAN and SASE.
- Hybrid Approaches: MPLS is often maintained alongside broadband or DIA for mission-critical apps.
- Cloud-First Strategies: Cloud applications are accelerating migration away from MPLS.
- Telecom Cost Management: Rising costs drive IT leaders to seek alternatives, as outlined in Proven Ways of Controlling Telecom Costs.
- Carrier Transformation: Providers now bundle MPLS with managed services or hybrid WAN solutions to remain relevant.
Best Practices for Organizations
- Audit MPLS Usage: Identify workloads that still require guaranteed QoS.
- Plan a Migration Path: Consider hybrid deployments combining MPLS with SD-WAN or DIA.
- Optimize Costs: Benchmark carrier contracts and explore alternatives.
- Cloud Strategy Alignment: Ensure WAN architecture supports SaaS, UCaaS, and IaaS.
- Leverage Managed Services: Offload MPLS and WAN operations to providers where possible.
- Security Integration: If maintaining MPLS, integrate it with broader zero-trust and SASE frameworks.
Related Solutions
Looking to move beyond traditional MPLS? Many enterprises are adopting SD-WAN, SASE, and Network as a Service (NaaS) to gain flexibility, reduce costs, and align with cloud-first strategies. Others leverage Global WAN Services or Network Services Global for scalable, global connectivity.
Explore related solutions designed to modernize enterprise networking and support digital transformation:
