Enterprise Business Communication: Comparing SD-WAN vs MPLS

Many of today’s most successful businesses still rely on a relatively complex physical infrastructure managed by their carrier network to connect multiple branch locations to a central office or data center. That legacy technology supports internet connectivity between two fixed locations. 

Although the wide area networks (WANs) transmitting information between local area networks (LANs) have become faster and more flexible over the years, thanks, at least in part, to the development of multi-protocol label switching (MPLS), many of today’s decision-makers are taking a step back and considering a software-powered alternative—they’re comparing SD-WAN vs MPLS. 

With the global embrace of today’s multi-channel digital landscape, upgrading and maintaining increasingly outdated technology doesn’t make a lot of sense. Instead, business owners and decision-makers are investing in cloud-sourced solutions offering more flexibility, scalability, and system security. If you’re on the fence about committing to enterprise business communication services that can be accessed from nearly any digital device, you may also want to consider how MPLS and SD-WAN compare. 

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.”

Multi-protocol label switching (MPLS) 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 MPLS technology 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.

Although this technology is in no danger of extinction, data networks have evolved considerably since the introduction of MPLS. That’s where SD-WAN (software-defined wide area network) technology fits into the data transmission equation. 

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, with good reason.

Related: Complete Guide to SD-WAN

The technology fueling (and supporting) today’s work-from-anywhere ecosystem requires connectivity to your private network through public channels to fully support group collaboration, remote file sharing, and cost-effective voice communication. SD-WAN ensures these cloud-sourced solutions are fast, secure, and reliable by first identifying and classifying a packet. 

Once the content is classified, software-derived WAN technology analyzes circuit performance while also matching each transmission to an application’s service level agreements (SLAs), QoS settings, and priority policies. If the system detects latency on one circuit, critical, timing-sensitive transmissions are routed to another. Software-defined WAN also eliminates the need for backhauling.  

How Will I Know Which Solution Is My Best Option?

MPLS and SD-WAN have the same purpose. Both technologies provide the type of high-performance, secure connectivity companies of all sizes need to share resources between multiple locations. They’re also designed in a way that ensures sensitive data remains protected. But like so many other connectivity solutions, there’s no single option ideal for every business. 

If everyone in your company works from a central location, your legacy equipment gives you few problems, and you’re getting a great rate from your service provider, you probably won’t be all that motivated to alter your game plan. 

But if you’re looking into some of the many ways your business could benefit from the latest advances in cloud-sourced communication solutions, you might want to give SD-WAN a second look. Before ruling in favor of one or the other, you may also want to consider how they compare based on the criteria you find most impactful.

Overall Cost of Connection Optimization

The overall cost of either solution can vary by provider. But generally speaking, MPLS is more expensive because it’s typically used to optimize connectivity on leased technology. If you’re currently running MPLS on your network, you’re probably paying a fee for your WAN, plus the additional cost of your MPLS based on factors that can include port speed and port type. Cloud-sourced SD-WAN has a reputation for being far more cost-effective because there’s not as much physical infrastructure to maintain. Instead, your routing is virtual.

Connection Security and Threat Detection

On its’ own, MPLS does not offer any native security. Instead, encryption is the responsibility of the organization, and security happens on your level at the point of entry or with the assistance of multi-function firewalls installed on at least one end of the connection. For an additional layer of protection, it’s important to have continuous screening for malware and other potential security risks. 

Related: How to Get the Best SD-WAN Security Standards

SD-WAN traffic, on the other hand,  is encrypted by default, providing an additional layer of security over MPLS. You’ll inevitably find that reputable unified communications as a service (UCaaS) providers prioritize SD-WAN security and will work with your organization, assess your system requirements, and recommend solutions. The best service providers have defenses designed to detect and block unauthorized access and security threats.

Capacity and System Flexibility

Whether you’re leaning towards sticking with hardware-based data transport or switching to a software-enabled alternative, you may also want to take a few minutes to consider how these two distinctly different solutions compare in terms of overall capacity and system flexibility. 

Although MPLS has been the “standard” corporate solution for years, MPLS networks aren’t all that flexible. Software-defined WAN is more resilient. Pathways between connection sites are determined based on real-time performance metrics. With the right service provider, connection failures are detected within milliseconds to help ensure uninterrupted service.

Hardware Requirements and Carrier Restrictions

Before choosing between MPLS and SD-WAN, you may also want to think about how they might compare in terms of hardware requirements, carrier restrictions, and overall performance. By nature, MPLS is a relatively simple solution that keeps labeled packets moving between connected points on your secure network—only those points—much like a train traveling along a track. Since there’s no deviation from the track, the route is optimized, and its performance assured. The track remains the same unless switched manually. 

SD-WAN is capable of traveling the same track, but also free to catch a bus, then board a boat, hail a cab, or ride a horse. You get the picture. SD-WAN is not bound by hardware requirements or carrier restrictions, making a software-defined wide area network far more flexible.

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

After comparing the similarities and differences between MPLS and SD-WAN, it’s easy to see why someone might assume SD-WAN will eventually replace MPLS. After all, market analysts anticipate a 65% CAGR in the SD-WAN market from 2023 to 2032. That’s a projected value of $800 billion within the next nine years. However, the “hybrid deployment model” is also primed for a nearly 75% growth rate. 

Does that hybrid include MPLS? It seems so. Since the integrity of a private MPLS network can be compromised if a business owner adds cloud-based solutions into their communication strategy haphazardly, SD-WAN could help that company augment their MPLS network, optimize connections to the cloud, and fortify their system. Similarly, MPLS is often used to help enhance SD-WAN security. It’s clear that some of the best technologies work even better together.

Could Your Business Benefit From SD-WAN Supported Unified Communication?

With live chat, video collaboration, automated messaging, and desktop sharing dominating today’s work-from-anywhere landscape, many companies are finding it increasingly difficult to meet the needs of their remote and hybrid workforce. As frustrations rise and workplace dissatisfaction increases, productivity declines. If you’re feeling the strain, maybe it’s time to start investigating your options.

At BCM One™, we bring a lot more than technology to the table. We’re committed to working with mid-sized, multi-site organizations to help them plan and implement secure, compliant, cost-effective business communication solutions. Our cloud-based geo-redundant monitoring platform gives you “always-on” monitoring of multiple services and real-time insight into the health of your network. 

To learn more about our nextgen communications solutions, managed services, and add-on integrations, visit BCM One™ to browse our resources, learn more about our company, or submit a contact form. When you’re ready to streamline your processes, we can help you get from where you are to where you want to be.