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MPLS vs. VPN vs. Leased Line Five Factors to Consider

In establishing connectivity between remote offices or network elements, enterprises have multiple options to consider. The basic conundrum is the question of whether to use a leased line, a Virtual Private Network (VPN) or an MPLS architecture. Although all three establish connectivity, the technologies are not exactly an apples-to-apples comparison. Leased lines are physical entities. VPNs can be provided over different network layers (Layer 2 or Layer 3). MPLS is a network traffic routing mechanism considered a layer 2.5 technology, and can also be used to provide VPN services.

Here are five factors to consider in the MPLS vs. VPN vs. leased line debate.

COST. Leased lines are the most expensive. VPNs are less costly and come in multiple flavors – layer 2 VPNs are more secure, layer 3 VPNs are faster to deploy and less expensive but exposed to the risks and congestion of running over the public Internet. MPLS increases efficiency compared to relying on IP-based routing.

“It really comes down to the level of dedicated service. The more dedicated the service, the more costly it tends to be,” said Eric Bozich, vice president of marketing for CenturyLink’s wholesale division.

SECURITY. Leased lines win out in terms of security, as they are dedicated only to a specific customer’s traffic. VPNs over the public Internet are the least secure. MPLS falls somewhere in the middle, as it emulates the “feel” of a dedicated line but still relies on shared network elements. MPLS has no inherent encryption and its security depends heavily on the network core being secure, according to Professor Jose Santos of the University of Colorado at Boulder’s Telecommunications Department.

RELIABILITY. Again, leased lines come out in front. VPNs can be subject to the variability and congestion of the open Internet as traffic makes its way from one network point to another, as it shares the virtual road with other traffic. MPLS allows prioritization of traffic and establishment of quality of service levels, including the definition of fallback paths to ensure reliability in the event of outages within the network requiring traffic to be re-routed.

SCALABILITY: Leased lines are the most difficult to scale, both because of the time needed for deployment and the expense. Layer 3 VPNs are quick and easy to deploy, but can become complex to manage as a business grows. MPLS is widely accepted as an efficient technology that is easily scaled.

OPERATIONAL DATA NEEDS: This includes the question of the type of data flowing and the business’ network needs. Does the business require only point-to-point communication between two locations? Point to multi-point? A mesh network covering multiple locations, where each branch must be able to communicate with all others? Leased lines again fall to the rear in terms of easily addressing complex network needs, particularly for medium-sized businesses. MPLS has both point-to-point and one-to-many capabilities for communication.

According to research company Infonetics, both MPLS and Ethernet VPN services have been growing quickly, and the growth is expected to continue.

“The move from legacy frame relay, ATM, and leased line services onto Ethernet and IP services is quickening as businesses put a razor-sharp focus on staying competitive in today’s highly interconnected, mobile, video- and cloud-oriented world,” notes Michael Howard, co-founder and principal analyst of Infonetics Research. “By 2015, ATM and frame relay will virtually vanish, while private leased lines will be around a bit longer.”

Howard added that despite expected slowdowns in Europe, Infonetics expects solid growth ahead for both MPLS and Ethernet services, with the two topping $81 billion worldwide by 2016. Global Ethernet and MPLS IP VPN service revenue grew a combined 13% in 2011 to just over $50 billion, driven by increasing data traffic, cloud services, and businesses trying to cut their costs. Infonetics noted that more than 90 percent of spending on mobile backhaul equipment in 2011 was on IP/Ethernet gear.