Understanding MPLS and How It Works

Multi-Protocol Label Switching (MPLS) is a high-performance data-carrying technique that speeds up and controls the flow of network traffic. Unlike traditional routing, which relies on IP addresses, MPLS uses labels to direct data packets through predetermined, optimized paths - ensuring consistency, low latency, and better Quality of Service (QoS).

It’s widely used by enterprises for applications requiring real-time performance, such as video conferencing, VoIP, and financial transactions.

How Data Travels Across a Network​

When data moves from one device to another, it’s divided into small packets. Each packet carries a header containing information about its origin, destination, and routing path.

Routers forward these packets across various networks until they reach their destination. However, traditional routing can cause delays because each router independently decides the next hop, leading to variable paths and inconsistent latency - especially for time-sensitive apps.

That’s where MPLS comes in.

---

How MPLS Works​

With MPLS, packets are assigned labels instead of relying solely on IP addresses. These labels determine a specific Forwarding Equivalence Class (FEC), grouping packets with the same destination and service requirements.

The first router - called the ingress router - tags the packet with a label. As the packet moves through the network, each MPLS-enabled router (called an LSR or Label Switch Router) reads the label and forwards the packet along a predefined Label-Switched Path (LSP).

Since all packets in the same class follow the same LSP, MPLS delivers:
Faster routing
Predictable paths
Reduced packet loss
Consistent latency

---

MPLS Header Explained​

Each MPLS packet carries a shim header between Layer 2 and Layer 3, containing:

1. Label - Identifies the path (LSP) for forwarding.
2. Experimental bits (Exp) - Used for QoS priority.
3. Bottom-of-Stack (S) - Indicates the last label in a stack.
4. Time-To-Live (TTL) - Defines how many hops a packet can make.

Because this header sits between the data-link and network layers, MPLS is often called a Layer 2.5 protocol - combining the speed of Layer 2 with the intelligence of Layer 3.

---

Types of MPLS Traffic Classes​

Enterprises often categorize traffic using Classes of Service (CoS) to ensure high performance for critical applications:

• Real-Time: Voice and video (low latency)
• Mission-Critical: Business apps like CRM
• Best-Effort: Non-urgent data such as email

By prioritizing packets, MPLS guarantees reliability where it matters most.

---

MPLS vs. VPN and BGP​

MPLS and VPNs often work together to create secure and efficient private networks.

• MPLS VPNs extend private networks over shared infrastructure while maintaining isolation from public internet traffic.
• BGP (Border Gateway Protocol) is often used with MPLS for dynamic route exchange between Provider Edge (PE) routers.

In an MPLS VPN setup, PE and CE routers collaborate to transport labeled packets across the provider’s core network, forming scalable and flexible virtual private networks.

---

MPLS and SD-WAN: The Evolution​

While MPLS has long been the gold standard for reliability and performance, modern businesses are shifting toward SD-WAN.

SD-WAN (Software-Defined Wide Area Network) offers similar benefits - like traffic prioritization and path optimization - but adds:

• Cloud readiness
• Real-time centralized control
• Encrypted connections over broadband or LTE
• Lower operational costs

Many companies now use a hybrid model, combining MPLS for mission-critical links and SD-WAN for cloud traffic.

---

Key Benefits of MPLS​

• Guaranteed Quality of Service (QoS)
• Reduced network congestion
• Predictable and consistent performance
• Enhanced scalability and reliability
• Secure, private data transport

---

Final Thoughts​

MPLS remains a powerful, enterprise-grade networking technology that ensures stability and low latency for critical applications. However, as cloud adoption and mobility grow, SD-WAN is becoming the go-to solution for modern networks, offering flexibility, visibility, and cost savings - all while maintaining the security and performance principles that MPLS pioneered.
In essence, MPLS built the foundation - and SD-WAN is the evolution.