Thursday, July 07, 2011

Cost Of MPLS .... Fact And Fiction

The cost of providing MPLS VPN is usually less than providing leased line coverage. You can save your business a significant amount on the cost of your voice/data network by opting for a MPLS solution.

There are two aspects to an MPLS network which contribute to this.

Also bear in mind that end-user costs are not always directly related to the actual cost of deployment. Very often a service differs from another purely in how it is billed and that companies will do clever bundles to attract customers to use a service in a particular way.

However, comparing MPLS with a mesh of leased lines, there are genuine differences in cost base.

With MPLS you are sharing a lot of the infrastructure with others. Apart from the tail circuit to each site (which is typically a "last mile" dedicated circuit) everything else is shared bandwidth and equipment. This is unlike a leased line where (even though you are multiplexed onto shared equipment in the middle) you have dedicated bandwidth from end to end. With a leased line the service provider has to provide the full bandwidth to every circuit whether it's being used or not. With MPLS and other shared network technologies, the Service Provider aggregates all of the traffic and looks at the actual usage, and only has to provide enough bandwidth for typical peak usage.

Compare this with the telephone network where the telephone company does not provide dedicated bandwidth for every user to contact every other user. they provide a shared infrastructure which is dimensioned to cope with peak-time usage. Occasionally this doesn't work and your call cannot be placed. In the data world, your packets will be delayed, but this is normally not important unless your application is very delay sensitive, in which case you can pay for this traffic to be prioritized.

The other thing to remember is that, in general with an MPLS type network, you only need a single connection from each of your sites to the service provides local point of presence. Typically this is a lot shorter connection than providing a dedicated connection between offices on (for instance) opposite sides of the country and, as I said, you only need one connection. Compare this with typical leased line networks where, for more than two sites, you will need multiple connections at some or all sites. For a fully meshed 5-site leased-line network you will need 10 leased lines between offices. With MPLS you will need 5 short access circuits to the local PoP, which is clearly cheaper.

If you only have two sites, or if all your sites are fairly local to each other, it's possible that MPLS doesn't make sense, but in general if you have multiple sites and they are a good distance from each other, MPLS is more cost effective than leased lines. The greater the distance and the more sites there are, the better the saving.

To take advantage of the cost savings using MPLS for your network infrastructure, simply request assistance and a free quote here: MPLS Solution

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