Enterprise MPLS vs SD-WAN: Comparing Business Communication Systems

Businesses face increasing pressure to maintain reliable connectivity across distributed locations and remote teams. While many organizations still rely on enterprise multi-protocol label switching (MPLS) networks to connect their branch locations and data centers, the landscape of business communication is rapidly evolving. Decision-makers must now evaluate whether their existing infrastructure can effectively support modern collaboration needs.

The convergence of cloud services, remote work requirements, and digital transformation has organizations reassessing their network architecture. While enterprise MPLS solutions have long been the backbone of corporate connectivity, many businesses are now considering software-defined alternatives that promise greater flexibility and scalability. SD-WAN offers significant benefits such as improved network management, enhanced security, reduced costs, and optimized user experience, especially for remote connections and IoT device management.

Creating a future-ready network infrastructure requires thoughtful evaluation of both traditional and emerging technologies. This evolution presents both opportunities and challenges for organizations. While cloud-based solutions offer compelling benefits in flexibility, scalability, and accessibility, they must be integrated thoughtfully with existing infrastructure to maintain security and performance. As businesses evaluate their options, understanding how MPLS and SD-WAN complement or replace each other becomes essential for making strategic technology decisions.

SD-WAN vs MPLS: What Is MPLS?

Before MPLS, businesses transmitting data directly between two secure points sent signals that carried no identifying information other than a destination IP address. There were no details about the type of data the packet contained or the route best equipped to move that information to its destination. 

When reaching a router along its path, complex routing “tables” determined the packet’s next stop. The entire process was repeated at each router until the information packet eventually reached its final stop. Since each routing “decision” was made independently, it could take a considerable amount of time for data to reach its intended target. That delay often caused slow data transmissions, poor video quality, questionable audio quality, or too much “lag.”

Enterprise MPLS technology was initially developed to connect organizations with geographically diverse locations to their enterprise data centers more efficiently. To make the best use of bandwidth (and boost overall efficiency), MPLS technology assigns class of service (COS) “labels” to data packets as they enter a business network. Also known as a forwarding equivalency class (FEC), the bits of information assigned to each label specifies the type of content in each packet. 

The content type establishes where each data packet ranks in priority. To ensure optimal quality of service (QoS), fast, low-latency paths are reserved for “time-sensitive” transmissions like audio and video files. To ensure security, all shared resources are “backhauled” through a central hub for authentication.

How Does SD-WAN Factor into the Equation?

The basic structure of enterprise MPLS provides a straightforward, stable, streamlined connection, but the hops and nodes involved in the connection play a crucial role in determining the performance and reliability of the network. As the number of hops or nodes on the network increases, the complexity of transmitting and connecting data packets also increases.

While MPLS continues to provide essential benefits for many organizations, particularly in ensuring predictable performance for critical applications, modern business needs have evolved beyond traditional point-to-point connections. This evolution has given rise to software-defined wide area network (SD-WAN) technology, which offers a more flexible approach to network management and application delivery.

SD-WAN transmits data packets between corporate data centers and remote offices, but also has the capacity to manage multiple connection types simultaneously, a benefit considered all but essential for many business owners looking into cloud-sourced communications solutions. SD-WAN can optimize access to cloud services without relying on centralized infrastructure like a corporate data center, reducing latency and improving efficiency.

In today’s work-from-anywhere ecosystem, organizations need solutions that can support both private and public network connectivity to enable seamless group collaboration, remote file sharing, and cost-effective voice communication. SD-WAN addresses these needs through intelligent packet classification and routing. It enhances network performance by improving connectivity and optimizing bandwidth allocation.

SD-WAN technology analyzes circuit performance in real-time, matching each transmission to specific service level agreements (SLAs), QoS settings, and priority policies. When the system detects latency issues, it automatically reroutes critical transmissions to maintain optimal performance.

This dynamic routing capability, combined with the elimination of backhauling requirements, makes SD-WAN particularly attractive for organizations supporting hybrid work environments. Additionally, SD-WAN integrates with security measures to ensure secure connectivity, addressing network security challenges.

SD-WAN optimizes and routes network traffic efficiently through the use of application policies and centralized management, ensuring high performance and scalability.

Moreover, SD-WAN delivers essential elements for security frameworks by routing traffic efficiently and securely across multiple links, supporting secure traffic segmentation.

SD-WAN enables organizations to manage their networks programmatically, enhancing performance, user experience, and prioritizing critical business traffic across various transport methods–but the effectiveness of SD-WAN depends on choosing a secure solution that meets current and future business needs, ensuring optimal results.

Which Solution Is the Best Option?

MPLS and SD-WAN have the same fundamental purpose: providing high-performance, secure connectivity for resource sharing between multiple locations. While both technologies protect sensitive data, their implementations differ significantly to suit varying business needs.

Rather than viewing these options as competing solutions, many organizations now recognize the potential benefits of a hybrid approach. For businesses with established enterprise MPLS infrastructure, the question often isn’t about complete replacement, but rather about strategic enhancement of existing networks to support modern business requirements. Selecting the right SD-WAN solution tailored to the unique needs of businesses is crucial, as it ensures alignment with both security and scalability requirements.

If your organization operates primarily from centralized locations with stable bandwidth needs and your current infrastructure meets your performance requirements, maintaining your existing setup may make sense. However, if your business is expanding its cloud services adoption, supporting remote workers, or seeking more flexible scaling options, incorporating SD-WAN capabilities could provide valuable benefits.

Overall Cost of Connection Optimization

While costs vary by provider and implementation, enterprise MPLS typically requires higher investment due to its dedicated infrastructure requirements. Organizations usually pay for both WAN connectivity and MPLS services, with costs determined by factors like port speed and type. 

Modern SD-WAN solutions often prove more cost-effective, particularly for organizations with significant cloud service usage, as they can utilize various connection types and optimize traffic routing dynamically. However, the true cost comparison should consider factors like existing infrastructure investment, required service levels, and long-term scalability needs.

Connection Security, Network Security, and Threat Detection

Security considerations have evolved significantly in today’s threat landscape. While enterprise MPLS provides inherent traffic separation, it requires additional security measures at network endpoints. Organizations must implement their own encryption protocols and maintain comprehensive security monitoring at points of entry.

Modern SD-WAN solutions typically include built-in security features like encryption, next-generation firewalls, and advanced threat detection. Many providers now offer integrated security and SD-WAN services (sometimes called SASE – Secure Access Service Edge) that combine network optimization with comprehensive security controls. This integration can simplify security management while providing robust protection for both on-premises and cloud-based resources.

Capacity, Network Traffic, and System Flexibility

Network capacity and adaptability requirements have evolved significantly with the rise of cloud services and remote work. While enterprise MPLS networks excel at providing predictable performance through dedicated pathways, they offer limited flexibility for rapid scaling or bandwidth adjustment.

Modern SD-WAN architecture takes a more agile approach to network management. By continuously monitoring performance metrics across multiple connection types, SD-WAN can automatically optimize traffic routing in real-time. This dynamic capability allows organizations to quickly adapt to changing bandwidth needs, support new locations, and maintain service quality even during network disruptions.

Hardware Requirements and Carrier Restrictions

The fundamental differences between these technologies become particularly apparent when examining their infrastructure requirements. Enterprise MPLS operates like a dedicated railway system—highly efficient but constrained to specific routes and requiring specialized infrastructure at each point. This approach ensures consistent performance but limits deployment options and carrier choices.

SD-WAN, by contrast, functions more like a smart transportation system that can utilize any available path to reach its destination. This flexibility allows organizations to:

• Combine different types of connectivity
• Work with multiple carriers
• Deploy new locations more rapidly
• Adapt to changing business needs without significant hardware investments

In evaluating these infrastructure options, organizations must consider their unique requirements around performance, security, and scalability. While some businesses may benefit from maintaining dedicated pathways for mission-critical applications, others might find greater value in the flexibility and cost advantages of software-defined solutions. 

Many organizations are discovering that a hybrid approach, leveraging both technologies strategically, provides the optimal balance for their evolving needs.

Is Software Defined-WAN Replacing Multi-Protocol Label Switching?

Despite the rapid growth of SD-WAN adoption, the relationship between these technologies is evolving toward cooperation rather than competition. The SD-WAN market, valued at USD 5.19 billion in 2023, is projected to reach USD 59.41 billion by 2032, growing at a CAGR of 31.14%.

This growth is driven by increasing demands for efficient, secure, and cost-effective network infrastructure management, particularly as organizations embrace cloud services and hybrid work environments. Traditional WAN systems face drawbacks such as difficulty in changing carriers, high costs associated with private circuits, and complexities in management, whereas SD-WAN simplifies management, provides direct access to cloud applications, and offers greater flexibility and cost-effectiveness.

Enterprise MPLS continues to play a crucial role in scenarios requiring guaranteed performance and security, such as critical business applications or sensitive data transmission. Meanwhile, SD-WAN provides the agility and cost-effectiveness needed for cloud services and remote work support. This complementary relationship allows organizations to optimize their network infrastructure based on specific business requirements rather than choosing between technologies.

Optimizing Business Communication for Today’s Workplace

The demands of modern business communication extend beyond just enabling collaboration – they require creating a secure, reliable foundation for business operations. While video conferencing, real-time collaboration, and cloud-based applications drive productivity, organizations must ensure these tools are protected by robust security measures that can adapt to evolving threats. As cyber risks continue to grow more sophisticated, the ability to maintain both high performance and comprehensive security becomes crucial for business continuity.

Working with an experienced technology partner can help you navigate these choices and implement solutions that align with your business objectives. BCM One’s expertise in both traditional and modern networking technologies makes us uniquely positioned to help organizations optimize their network infrastructure for today’s business demands. 

Our comprehensive approach ensures that whether you need enterprise MPLS reliability, SD-WAN flexibility, or a hybrid solution, you’ll have the support and guidance needed to achieve your communication goals while maintaining the highest security standards. Contact BCM One today to learn more.