What is MPLS? WAN Technology explanation

What is MPLS,, CE, PE, and P routers?

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When working in the IT department of an enterprise, the word MPLS may come up. What is MPLS, and why enterprises like it? In this post, we explain what is this technology, and what are its strengths and weaknesses. We also use that to see where the industry is heading.

What is MPLS?

In short, MPLS is a WAN technology to privately connect remote sites. In fact, a company may have several offices scattered across the country or the globe. However, they all need to access the same resources, like internal tools and databases. Thus, the company needs to connect all the sites together, and WAN technologies do that. In fact, WAN stands for Wide-Area Network, since the purpose of this field of networking is connecting sites that are far apart.

MPLS is one of the options you have in the WAN world. But, what is MPLS, exactly? MPLS is a highly customizable way of connecting sites. It is virtually private, meaning that it feels like you have your own, private, network between the sites. It is somehow like you are running direct cables from one site to another. However, the truth is that the provider offering you MPLS takes care of everything in-between your two sites so that it is transparent to you.

The advantages of MPLS

MPLS is the leading technology for private WAN. It displaced other older technologies like ATM, and for a reason. MPLS offers a set of features that perfectly match the need of many enterprises.

  • It is a true private network. Even if the provider runs your MPLS in the same hardware where they also run MPLS networks of other customers, you have your own and isolated virtual domain.
  • Providers can grant you upload and download bandwidth.
  • It is subject to Service Level Agreements, meaning that if the bandwidth is not granted or if the link is unavailable up to a level that breaches the agreement, you can get a partial refund.
  • MPLS support Quality of Service (QoS), meaning that you can ensure the right business applications get the right amount of bandwidth during peak hours

For this reason, enterprises keep adopting MPLS as their backbone network between remote sites.

The disadvantages of MPLS

So far so good, but what are the disadvantages of this technology? The technology by itself has no disadvantage, but we need to put it into context. In fact, MPLS is extremely expensive. SLA, QoS, granted bandwidth and all its features are not free. The provider needs to put a team of engineers to create your virtual MPLS domain, and also have some people who manage it. With no surprise, you can quickly reach 1000$ a month for a single Mbps!

But the cost is not the only thing to consider. Since MPLS has a great level of customization, it also has a great level of complexity. Most of it is inside the provider, and you don’t see it. However, you still need to have some networking IT skills to connect your sites to the MPLS intelligently. Having such skills is not a problem for a large enterprise that can rely on a small army of professionals. However, it may be an issue for a smaller business that is starting to go national.

MPLS vs Internet

MPLS is a private network: everything that happens in the MPLS remains in the MPLS. Of course, you can configure your MPLS to be a transit so that remote sites can reach the Internet through the MPLS, but MPLS by itself is completely isolated. Thus, going for MPLS or WAN, in general, is often preferred when you have internal tools that are not secure.

Many companies still have legacy tools that are full of vulnerability features, and you simply cannot expose them over the Internet. Therefore, WAN technology is a must. However, you can also consider making IPSec VPNs over the Internet to encrypt the traffic between the sites, but this solution adds way more complexity on your side, and you don’t have the granted bandwidth or SLA.

Instead, if your company has no internal tools, but instead all the tools are in the cloud, it can make sense to consider an Internet-only approach.

How does MPLS work?

Now that we explained what is MPLS, we can dive a little bit into its technical functionality. An MPLS network, just like any other network, is a set of routers, devices that forward traffic. You have three types of routers in MPLS:

  • Customer Edge (CE) is the router that resides in the customer facilities. Is the last device managed by the customer before entering the provider domain. However, since the CE holds a lot of complexity, many providers offer a server of “managed CE”, where they take care of this router as well.
  • Provider Edge (PE) is the first provider’s router. Many CEs connect to the same PE, which aggregates them.
  • Provider Router (P) is at the core of the provider and forwards packets based on MPLS labels.
What is MPLS? MPLS is a technology to connect remote branches privately, world-wide. You have three types of routers involved, CE, PE, and P.

MPLS forwarding in detail

How do these routers integrate? If you have two sites that want to communicate, the traffic will go to the CE of the originating site. The CE applies some settings, like the Quality of Service, and sends the traffic to the PE, that receives the packet on a dedicated VRF. A VRF is a virtual instance of the router, and each customer has its own, so that no customer can see the traffic of other customers. The PE router puts an MPLS label in the packet, and send it to the P router.

All P routers along the path will forward the packet based on the MPLS label, without knowing any information about the customer’s addressing. In the end, the packet will reach another PE.

Using the MPLS label, the PE is able to remove that label and put the packet back in the right VRF domain. Then, it forwards the packet to the connected CE. Is is common to have a flat MPLS network. In this design, even if the provider’s network is complex, you feel like a huge switch: all sites can speak with all other sites over MPLS.

Where is the industry going?

In the upcoming years, we will see reduced demand for MPLS. This is because many applications are shifting to the cloud, which is an Internet-only business. Thus, the requirement for private and internal bandwidth will be reduced to the legacy and business-critical applications, until all of those are re-designed to be Internet-based. MPLS is not going to disappear any time soon, but its costs and complexity make it less interesting than other technology trends like the cloud. Ad interim, SD-WAN is a great option for an enterprise that wants to work with multiple WAN technologies, like MPLS and Internet.

Wrapping it up

In this post, we gave a quick explanation of what is MPLS. MPLS is WAN technology with a high-level of customization, complexity, and reliability. It is the preferred choice to run critical applications on a private network, but its high operational costs make it less interesting than other alternatives, like migration applications to the cloud.

Have you ever had to work with MPLS? What do you think about its future? Let me know in the comments.

Picture of Alessandro Maggio

Alessandro Maggio

Project manager, critical-thinker, passionate about networking & coding. I believe that time is the most precious resource we have, and that technology can help us not to waste it. I founded ICTShore.com with the same principle: I share what I learn so that you get value from it faster than I did.
Picture of Alessandro Maggio

Alessandro Maggio

Project manager, critical-thinker, passionate about networking & coding. I believe that time is the most precious resource we have, and that technology can help us not to waste it. I founded ICTShore.com with the same principle: I share what I learn so that you get value from it faster than I did.

Alessandro Maggio