What is a Multiprotocol Label Switching (MPLS) circuit? An easy guide

To stay competitive, you need a network that’s fast, reliable, and built for today’s demands. For companies handling real-time applications, high data traffic, or secure communications, an MPLS circuit can deliver just the performance edge you’re looking for.

An MPLS circuit boosts reliability across all your locations and provides a layer of separation from the public Internet. For full data protection, it’s best paired with added security like VPNs or encryption. 

Understanding how MPLS circuits work could be your next step toward a network that’s ready for anything—keeping you ahead in a fast-paced market.

This article talks about:

• What an MPLS circuit is
• How MPLS works
• MPLS benefits
• MPLS use cases
• Challenges associated with MPLS
• How MPLS fits with other technologies
• Is MLPS right for your network?
• Using Meter Connect to integrate your technologies

What is an MPLS circuit?

A Multiprotocol Label Switching (MPLS) circuit is a network technique that speeds up data flow by using labels instead of traditional IP routing. 

In a typical IP network, each router decides a packet’s next stop based on its IP address, which can create delays as routers perform these lookups individually. 

With MPLS, a label is attached to each data packet, guiding it along a predefined path known as a Label-Switched Path (LSP).

This label-based system reduces the workload at each router, allowing data to move faster and with lower latency—ideal for businesses that need reliable, high-speed connectivity across multiple locations.

How MPLS works

MPLS works by tagging each data packet with a label as it enters the network, guiding it along a pre-planned route. Unlike traditional IP routing, where each router along the way decides the next step based on the destination IP address, MPLS sets the entire path in advance.

Think of it like a train system: each packet is a passenger with a ticket (the label) that spells out the whole journey. The passenger boards the right train and follows a predetermined route; no need to figure out the directions at every stop. This pre-planning speeds up the journey, just as MPLS boosts data transmission by eliminating the need for each router to make routing decisions at every hop.

Benefits of MPLS

MPLS stands out in networking for several reasons, offering tangible benefits that cater to both performance and control in data transmission. It provides a level of control and efficiency that is difficult to match with other networking technologies.

Improved speed and reduced latency

Unlike traditional IP routing, where each router independently makes decisions based on the IP address, MPLS assigns a label to each packet, directing it along a predefined path. It significantly reduces the time spent on routing lookups.

Streamlining the routing process enables MPLS to decrease latency and accelerate data transmission, which is particularly beneficial in large, complex networks where every millisecond counts.

Optimized bandwidth utilization

In environments where different types of traffic coexist, such as VoIP calls, video streams, and bulk data transfers, MPLS enables network administrators to allocate bandwidth according to the priority of the traffic.

For instance, high-priority traffic like real-time voice and video can be given precedence, reducing delays and improving overall network performance. This level of traffic engineering is challenging to achieve with traditional IP routing and is particularly valuable for maintaining consistent performance across various applications.

Enhanced security

MPLS provides a level of isolation from the public Internet, but it does not inherently provide encryption or enhanced security. To secure data, MPLS often needs to be combined with Virtual Private Networks (VPNs) or other encryption methods.

When used in conjunction with VPNS, MPLS can create isolated pathways for sensitive data, reducing exposure to external threats. A feature like this can be especially important in industries like finance and healthcare, where data security is a top priority.

Leveraging MPLS with a well-configured VPN allows organizations to achieve a higher level of security without the complexity and overhead of more elaborate encryption methods.

Quality of Service (QoS)

One of the most compelling advantages of MPLS is its ability to enforce Quality of Service (QoS) policies. In scenarios where certain types of traffic, such as voice or video, require guaranteed performance, MPLS labels can assign QoS levels to packets.

Prioritizing traffic in MPLS ensures that high-priority data receives the necessary resources for rapid and uninterrupted transmission. When dealing with real-time services, such as unified communications or video conferencing, MPLS is significant in preventing issues like jitter, latency, and packet loss, which can degrade the user experience in less controlled networks.

Use Cases of MPLS

MPLS is a key technology in industries that require high-speed, reliable, and secure data transmission. Its capabilities make it especially useful in sectors where network performance is directly linked to service quality and operational outcomes.

Financial services

In banking and finance, the speed and reliability of data transmission are crucial for maintaining efficient operations. MPLS optimizes the routing process by creating LSPs, which help reduce latency and ensure that transactions are processed quickly and reliably.

Direct routing reduces the chances of delays, making MPLS a valuable tool for maintaining the integrity and efficiency of financial operations. The technology supports the stringent requirements for secure and fast data handling, which is critical in an environment where every millisecond matters.

Healthcare

The healthcare industry demands swift and secure transmission of sensitive patient data across various locations, including:

• Hospitals
• Clinics
• Data centers

MPLS meets these needs by prioritizing important medical data, such as electronic health records and real-time imaging, ensuring that it is delivered without interruption. The capability supports timely decision-making in patient care, which is particularly important in medical environments.

Enterprise networks

Large organizations with multiple branches often face challenges in maintaining consistent network performance across all locations. MPLS offers a solution by providing a unified network framework that delivers high-quality service across all sites.

Whether it’s supporting centralized applications or facilitating communication between offices, MPLS helps enterprises maintain operational efficiency. The ability to prioritize data traffic based on its importance means that critical business applications, such as enterprise resource planning (ERP) systems and voice-over-IP (VoIP) services, receive the bandwidth they need.

Challenges with MPLS

MPLS is known for its reliability and performance, but it doesn't come without some challenges, particularly when you're looking at the overall cost, the complexity of implementation, and the reliance on an ISP.

Cost

MPLS circuits can be quite expensive, and that’s something that can't be ignored, especially for small to medium-sized businesses. The cost isn't just in the service itself but also in the specialized hardware and ongoing management required to keep the network running efficiently. Expenses could add up quickly for businesses that have tight budgets.

While MPLS can be expensive, one way to offset these costs is by adopting a hybrid approach. Many organizations are now combining MPLS with other, more cost-effective technologies like SD-WAN. This allows for high-priority traffic to use the MPLS circuit, while less critical traffic can be routed through less expensive broadband connections.

Such a strategy not only reduces costs but also optimizes the use of available bandwidth. Carefully segmenting your traffic will allow you to achieve a balance between cost and performance that suits your business needs.

Complexity

MPLS isn’t a plug-and-play solution. It demands a high level of expertise to set up and maintain. This type of network design, configuration, and continuous management requires a deep understanding of networking principles, and not every IT team has that level of knowledge readily available.

Without the right skills in-house, companies might find themselves needing to hire external experts, which adds another layer to the cost and complexity.

The key is in the tools and expertise you employ. If your internal team lacks the necessary MPLS expertise, consider outsourcing the management of your MPLS network to a third-party provider that specializes in this area.

Managed service providers (MSPs) can handle the design, setup, and ongoing management of your MPLS network, allowing your in-house team to focus on other priorities. Alternatively, investing in training for your IT staff can be a longer-term solution, enabling them to manage MPLS networks effectively in-house.

ISP dependency

While MPLS can provide a highly controlled and reliable network environment, you’re essentially putting a lot of trust in your ISP. Any changes you want to make, or any issues that arise, often have to go through them. As such, it can limit your flexibility and can be frustrating if your network needs to evolve or if your ISP doesn’t meet your expectations.

The issue of dependency on your ISP can be addressed by building a strong relationship with your provider. Regular communication, clear Service Level Agreements (SLAs), and ongoing performance reviews can help ensure that your ISP meets your expectations.

Additionally, incorporating redundancy into your network design, such as having a secondary ISP or backup connection, can provide a safety net if issues with your primary provider arise.

How MPLS fits with other technologies

MPLS has long been a go-to solution for reliable data transmission across enterprise networks, but it doesn't operate in isolation. Integrating MPLS with other technologies like SD-WAN (Software-Defined Wide Area Networking) can provide a more dynamic and flexible approach to managing complex network environments.

Combining MPLS and SD-WAN

MPLS is well-regarded for its ability to maintain consistent performance, particularly in applications where stability is crucial, such as VoIP or video conferencing.

On the other hand, SD-WAN introduces flexibility into the network by allowing different types of WAN links—like broadband, LTE, and MPLS—to be managed and optimized through a centralized software platform.

When these two technologies are combined, they create a hybrid network that offers several advantages:

• Optimized traffic management: MPLS can handle high-priority traffic that requires consistent performance, while SD-WAN can dynamically route other traffic over more cost-effective links based on real-time conditions.
• Cost-effective scalability: By using SD-WAN to offload non-priority traffic from MPLS circuits to less expensive alternatives like broadband, organizations can reduce operational costs without sacrificing performance where it matters.
• Adaptive networking: SD-WAN's ability to monitor and respond to network conditions allows it to reroute traffic to avoid congestion or outages, thereby maintaining network efficiency even as demand fluctuates.

Real-world application

Consider a multinational corporation with branches in diverse geographic locations. In regions where MPLS circuits are either too costly or difficult to deploy, SD-WAN can manage traffic using local broadband or LTE connections.

The MPLS network remains in use for locations where high-reliability connections are necessary, such as in regions with a high concentration of data centers or critical business operations.

Maintaining a high level of network performance across all locations while controlling costs becomes feasible by using MPLS for critical areas and offloading non-priority traffic to more affordable connections via SD-WAN.

Traffic that doesn’t require the reliability of MPLS can be routed through cheaper, more accessible connections, freeing up MPLS bandwidth for applications that demand it.

Is MPLS right for your network?

Deciding whether MPLS is the best choice for your network hinges on a thorough understanding of your organization’s specific requirements and the demands placed on your infrastructure.

Here are key factors to consider:

• Performance needs: MPLS is ideal for networks requiring reliable, low-latency connections, particularly for real-time applications like VoIP and video conferencing.
• Geographical spread: MPLS circuits are best for organizations with multiple, dispersed locations needing consistent network performance across all sites.
• Security: While not inherently encrypted, MPLS offers isolation from the public Internet, which is suitable for industries with sensitive data, especially when paired with VPNs.
• Cost vs. flexibility: MPLS is generally more costly but provides stable performance. If flexibility and lower costs are more important, SD-WAN could be a better option.
• Complexity: MPLS requires specialized management. If ease of management is a priority, consider SD-WAN for its centralized control and simpler deployment.

MPLS is a strong choice for networks that prioritize consistent performance across multiple locations. However, the decision should be based on your specific needs, budget, and the desired flexibility of your network.

Next steps: Integrate technologies with Meter Connect

Elevate your network infrastructure with Meter Connect. Designed to integrate effortlessly with technologies such as MPLS circuits and SD-WAN, Meter Connect delivers a network that’s fast, reliable, and adaptable to your evolving needs. 

By partnering with Meter, you’ll ensure your network is prepared for today’s demands and tomorrow’s innovations, keeping performance high and your business ready for growth.