Compare and Contrast: IP VPN and MPLS

By May 31, 2017MPLS


When comparing IP VPN and MPLS, the main differences are in the quality of service, who is in charge of the network management, and who has visibility within the network for wireless backhaul and remote locations.

The most important difference that sets apart IP VPN from MPLS is its point-to-point connection. For example, suppose a company with IP VPN has five sites, each site has a tunnel to and from each other site. So these five sites would equate to (5*(5-1))*2 or 40 unidirectional tunnels.

As opposed to IP VPN, MPLS is designed as a multipoint technology. There are no tunnels in MPLS; when site 1 needs to communicate with site 2, it looks up the site through the routing table, adds a distinct label that denotes the site, and then sends the packet across the MPLS backbone to the next router.

IP Virtual Private Networks and Multi-Protocol Label Switching are frequently used with no regard for any fundamental differences. However, at the same time, MPLS is now such an integral part of networks, to compare the two would be almost fruitless. It is a commonly held belief that IP VPNs and MPLS are nearly interchangeable. To further confuse the issue, in the network industry we tend to use the two terms synonymously, but IP VPNs and MPLS are obviously different.

Comparisons between these two technologies sometimes may fail to mention the fact that IP VPNs in many cases rely on an MPLS infrastructure. The equipment that runs IP VPNs and MPLS jointly is also expected to be utilizing VPLS and dedicated Internet access, as well as Layer 2 VPNs.

MPLS has become a major technology that is used in the universal platform on which all these other services operate. A company running IP VPN services is likely to be running through an MPLS backbone.

Although MPLS equipment may provide IP VPN connections, the VPN and MPLS methods have their differences.   There are a number of considerations your customers need to weigh in on when designing their networks around either.



Flexibility is the first of these considerations. VPNs are very flexible and dynamic for building larger networks with many small endpoints. The carrier partner can direct and provide performance assessments more easily. Despite their large size, VPNs are very configurable for the customer.


Management also comes into play. In most cases, your customer manages their VPN. The VPN for an MPLS service, on the other hand, is taken care of by the backhaul carriers.

Services and Security

Another consideration should be security and services. If your customer requires traffic prioritization and management, VPN might fall short of MPLS in their service capabilities. The fact that VPNs run on the open Internet may lead to privacy issues; which leads to within-network privacy. Although MPLS does not have encryption by default, it may be added to keep peeping Toms from reading or writing on customer files, in the unlikely event that access is possible though MPLS.

Encryption, simple authentication, and everything in between also has an effect on security, of course. The customer’s configuration may prove an important factor in whether MPLS or VPN is appropriate for them.


It is said that “cash is king,” so your customer may be more concerned with pricing than anything else. VPN is very often made cheaper by network operators. Each megabyte per second in MPLS can fall between $300 and $600, according to a Network World report. Connections on fiber MPLS can rack up double the charge.

Even then, North American and Western European customers pay less than their counterparts in other regions, as pointed out by TeleGeography, a research firm. In 2010, the median cost per month for a 1.5-Mbps MPLS IP VPN port.

The difference between VPNs and MPLS might be negated in the price aspect by vendors. Some vendors charge per port, regardless of network method.

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