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What Is MPLS and How Does It Work for Your Business?

This article was updated on October 27, 2022

At the highest level, multiprotocol label switching (MPLS) is all about networking and how data gets from A to B. It's a routing technique that makes data transfer more efficient, facilitating greater speeds, less waste of resources, and other tangible rewards. Let’s take a look at the technical requirements and benefits of MPLS, how it plays with SD-WAN, the advantages of MPLS+, and more.

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What Is MPLS?

Multiprotocol label switching is an ultra-reliable, premium-grade, IP-connected bandwidth solution that can help mid-size to enterprise companies build private-like networks — and has been a bedrock technology for more than 25 years. (The technology is projected to continue growing in popularity.)

In standard IP routing, the packets of data contain no information beyond the target/destination IP address where the packet is being sent. Therefore, every router along a particular packet's journey must make an independent forwarding decision based on the packet’s network-layer header.

The sum of all the individual routing decisions can result in degraded performance as each router processes the destination and matches the best route for the packet to take from its perspective, by referencing an often large and overbearing in-memory route table. This can be especially bad for latency-sensitive applications like real-time voice or video.

How Does MPLS Work?

MPLS leverages the concept of predetermined “labels” to route traffic, instead of relying solely on ultimate source and destination addresses. This is done by appending a short bit sequence to the packet, known as forwarding equivalence class (FEC) or class of service (CoS). These labels have the ability to be insightfully derived and also indicate the type of traffic they carry.

Why Should You Care?

MPLS is all about delivering a better quality communications experience. It allows for a simple way of segregating traffic-types so that better and faster routing decisions are available to the packets and applications that require higher performance metrics due to the inherent nature of the data. Therefore, applications that require a low-latency path (like voice and video) can be ensured the highest perceived quality.

This traffic segregation and classification allows for MPLS routers at the edge and core of a network to access a predetermined path (Label-Switched-Path or LSP) to route traffic based solely on criteria defined in the FEC. This makes table-look-up and routing extremely efficient and thoughtful.

Users can add info to each packet that dictates how it's handled. A business that needs enhanced performance from its communications platform, for instance, could use the technology to map those labels to low-latency paths. By contrast, businesses could use it to prevent certain types of communication traffic — one example is YouTube — from hogging vital bandwidth.

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SD-WAN for UCaaS: Optimizing Bandwidth on Any Network
Learn about the application of SD-WAN technology to UcaaS and its ability to deliver network quality of service efficiently and economically.

The Benefits of MPLS for Your Business

MPLS has a wide range of benefits: better performance, reduced network congestion, higher-quality, better bandwidth management and utilization of resources, scalability, security, and ultimately better end-user perceptibility.

MPLS has established itself in the role of connecting corporate point-to-point locations where IP traffic between retail stores, warehouses, regional offices, data centers, and more are paramount to end-user perception and are mission-critical to overall business success.

Note that there are downsides — these private-like connection types and their guaranteed performance SLAs can come at a higher cost and require a bit of additional technical/management complexity for optimal performance in various network architectures and topology models.


SD-WAN (Software Defined-Wide Area Networking) was born about 20 years ago, driven by the need to solve for MPLS-like performance at a more palatable price-point. SD-WAN brings a number of benefits to the table, even down-market to the small and micro-business segments:

  • high resiliency

  • high diversity

  • low latency

  • increased security

  • multi-path capabilities

  • self-correcting and forward-correcting connectivity

SD-WAN accomplishes this by moving next-generation routing intelligence and decision-making capabilities to the customer premises. When multiple internet connections are connected to a SD-WAN appliance, the appliance is able to leverage each internet connection independently and concurrently to determine the best path for the data to travel.

Per-packet decision routing is based on the real-time performance metrics of each individual circuit and in accordance with its custom-definable criteria, deciding how best and most efficiently to move those packets. The result is that these multiple circuits behave collectively as if they collectively are premium MPLS-like circuits.


Melding a primary MPLS network with an SD-WAN is the next logical step in striking the perfect balance between ultra-connectivity and financial constraints. You get the best-of-all-worlds options while significantly reducing costs.

The SD-WAN complement to a single MPLS solution provides an additional layer of ultra-redundancy, ultra-resiliency, and ultra-diversity to an already premium design. And each additional independent internet circuit added to the SD-WAN appliance enables the SD-WAN portion of the overall MPLS+ solution to increase resiliency, redundancy, diversity, and efficacy exponentially.

Want a Closer Look?

If you're in the market for a new enterprise business communications system, adding MPLS, SD-WAN, or both to your wish list could be a smart move.

Vonage can help you learn more about these technologies or find ways they could fit into your technology stack.

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