Multiprotocol Label Switching (MPLS) has been the backbone of enterprise networking for years. It ensures reliable, high-performance data transmission between enterprise locations by assigning labels to packets and predetermining paths through the network.
This technology was traditionally favored for its ability to prioritize traffic, particularly for mission-critical applications like VoIP, video conferencing, and other bandwidth-intensive services. MPLS excels in offering secure, consistent connections across geographically dispersed locations, a feature that businesses have long relied upon to ensure optimal service levels. However, this performance comes with a hefty price tag.
Rising Costs and the Need for Network Transformation
The cost of MPLS has been a growing concern for organizations, especially as they expand their network infrastructure to accommodate new offices, remote locations, or data centers. Typically, MPLS circuits are priced based on bandwidth, location, and Service Level Agreements (SLAs). As organizations scale, MPLS becomes exponentially more expensive. Additionally, businesses now rely more on cloud services and SaaS applications, creating the need for more bandwidth, which further drives up costs. These rising costs, coupled with the inflexibility of MPLS, have driven organizations to rethink their networking strategies.
How Digital Transformation and Cloud Migration Impact Network Demands
With the rise of digital transformation and cloud migration, the traditional hub-and-spoke network model that MPLS supports is increasingly seen as outdated. Enterprises are moving more workloads to public cloud platforms like AWS, Azure, and Google Cloud, requiring direct, secure, and flexible connections to these services. The demand for dynamic and scalable networking is further intensified by the shift to remote and hybrid work environments, where employees need to connect from anywhere. As a result, MPLS alone can no longer keep up with these demands, leading organizations to consider more cost-effective and agile alternatives like SD-WAN.
Challenges of MPLS: Why Organizations are Rethinking Their Networking Strategy
High Costs and Bandwidth Limitations
One of the primary reasons organizations are moving away from MPLS is its cost structure. MPLS circuits are not only expensive but also inflexible when it comes to bandwidth scaling. In today’s digital environment, where cloud applications and real-time services require high bandwidth, MPLS’s cost-per-megabit is prohibitively high. Scaling MPLS for growing bandwidth needs often means renegotiating contracts or paying significantly higher fees, which is a major drawback for businesses trying to control networking expenses.
Complexity and Scalability Issues
MPLS is not only costly but also complex to manage. Expanding an MPLS network involves configuring new routers, managing circuits, and dealing with multiple carriers, each with their own configurations and SLAs. This complexity slows down the process of scaling the network to meet evolving business needs. In contrast, newer solutions like SD-WAN simplify management and allow enterprises to scale quickly. The rigidity of MPLS is particularly problematic in fast-moving industries that require dynamic network configurations to stay competitive.
Limited Flexibility for Cloud-Based Environments
MPLS was designed for a time when traffic flowed between branch offices and data centers, but today’s businesses operate in a cloud-first environment. MPLS routes traffic through a central data center, increasing latency for cloud applications. This lack of direct access to the cloud makes MPLS unsuitable for modern enterprise needs, where users expect fast and reliable connections to SaaS applications, cloud storage, and other services distributed across the internet.
The Need for Increased Agility in Modern Businesses
Modern businesses need networks that can adapt to changing requirements, whether it’s supporting remote workers, integrating new applications, or responding to evolving security threats. MPLS is inherently static and requires manual configuration for changes in traffic patterns or business requirements. In contrast, SD-WAN offers dynamic routing and automated traffic management, enabling businesses to adapt more quickly and efficiently to network changes. This need for agility is a key driver in the shift away from MPLS.
Gartner’s Insights: SD-WAN as the New Standard for WAN Refresh
Here, we discuss the evolving role of SD-WAN and how it remains relevant despite claims of obsolescence. According to Gartner, more than half of WAN refreshes are now based on SD-WAN, driven by its ability to integrate networking and security functionalities. This shift is primarily due to the rising popularity of hybrid work models and the growing reliance on cloud applications, which traditional MPLS struggles to support.
Gartner’s research predicts continued growth in the SD-WAN market, with a compound annual growth rate (CAGR) of 16.8% through 2027. Much of this growth is attributed to SD-WAN’s ability to incorporate security features, a necessity in today’s cyber threat landscape. While the market has seen an evolution toward more lightweight and cost-effective SD-WAN solutions, particularly for remote work environments, traditional SD-WAN remains crucial for ensuring application performance, high availability, and simplified connectivity from branch offices to cloud services.
Why More Than Half of WAN Refreshes Are Shifting to SD-WAN
The rise of SD-WAN as the new standard for WAN refreshes can be attributed to several factors. First and foremost, SD-WAN enables businesses to cut networking costs by reducing reliance on expensive MPLS circuits. By routing traffic through cost-effective broadband internet links, businesses can achieve significant savings, sometimes as high as 60%. In addition to cost savings, SD-WAN offers improved performance and flexibility by dynamically selecting the best available path for traffic, ensuring optimal performance for mission-critical applications.
Key Factors Driving the Shift (Cost Savings, Performance, Flexibility)
Aside from cost savings, SD-WAN provides enhanced flexibility that MPLS cannot match. It supports seamless integration with cloud services, allowing for direct access to SaaS applications without the need to route traffic through a central data center. This reduces latency and improves the user experience for cloud-based applications. Furthermore, SD-WAN enables businesses to manage their networks centrally, simplifying the process of scaling and adjusting network configurations to meet business needs. Its integration with security solutions like next-generation firewalls (NGFW) and Secure Access Service Edge (SASE) further enhances its appeal, making it a holistic solution for both networking and security needs.
How SD-WAN Helps Cut Costs of Expensive MPLS
Offloading Traffic to Optimized, Secure Internet-Based Networks
One of the main advantages of SD-WAN (Software-Defined Wide Area Network) is its ability to offload traffic from expensive MPLS circuits to more affordable, optimized, and secure internet-based networks. Traditionally, organizations have relied on MPLS for guaranteed performance, security, and reliability.
However, MPLS comes at a significant cost, especially as businesses expand their digital infrastructure and demand higher bandwidth. SD-WAN offers a solution by allowing businesses to leverage lower-cost broadband internet and Direct Internet Access (DIA) to handle less critical traffic while reserving MPLS for high-priority or latency-sensitive applications.
SD-WAN dynamically routes traffic based on real-time conditions, choosing the most efficient path between MPLS and other broadband connections. It uses advanced algorithms to ensure application performance is maintained while reducing the strain on MPLS. By offloading traffic to secure internet links, SD-WAN can optimize network usage, delivering the same level of service for most applications without needing MPLS for every connection.
Potential to Cut MPLS Costs by Up to 60%
A key driver for organizations adopting SD-WAN is the potential to reduce networking costs by up to 60%. MPLS circuits, priced based on bandwidth and geography, can cost up to ten times more than broadband connections. SD-WAN enables organizations to shift a substantial portion of their traffic to cheaper connections without sacrificing performance, particularly for non-critical applications like file sharing or email.
By optimizing traffic routing and providing granular control over network priorities, SD-WAN allows businesses to maintain the quality of service (QoS) they need, all while significantly lowering costs. Instead of relying exclusively on MPLS for every data stream, companies can use a mix of internet and private links, achieving major cost savings and improving flexibility.
Hybrid WAN Models: MPLS and SD-WAN Working Together
While some organizations may choose to eliminate MPLS entirely, many adopt a hybrid WAN model where MPLS and SD-WAN work together. In this model, critical applications such as voice, video conferencing, and financial transactions may still use MPLS to guarantee the highest levels of performance and security. Meanwhile, less critical or cloud-based applications can be routed over the internet through SD-WAN.
This hybrid approach offers the best of both worlds: it reduces MPLS dependency while ensuring mission-critical applications remain on secure, reliable connections. SD-WAN’s ability to prioritize traffic and dynamically switch between MPLS and broadband ensures that network performance is optimized without requiring the highest-cost solution for every use case.
Real-World Examples of Cost Savings
Many organizations have successfully reduced their MPLS spending by adopting SD-WAN. For example, a global retailer operating hundreds of branches reduced its MPLS costs by 50% by implementing SD-WAN, offloading non-critical traffic to DIA and using MPLS only for point-of-sale transactions and real-time analytics.
Another case involved a healthcare provider with high network demand. By using SD-WAN to prioritize critical traffic (such as patient records and telemedicine services) over MPLS while shifting routine traffic (like administrative tasks) to broadband, they were able to reduce costs by 40%, while also improving network agility and response times.
Sustaining Service Levels While Transitioning Away from MPLS
Ensuring Uptime, Reliability, and Performance
One of the main concerns organizations face when transitioning from MPLS to SD-WAN is ensuring uptime, reliability, and performance. MPLS offers dedicated circuits and strict Service Level Agreements (SLAs), giving organizations confidence in guaranteed performance. However, SD-WAN has matured significantly, offering built-in mechanisms to sustain service levels, even when traffic is routed over less expensive broadband.
Through active monitoring and dynamic traffic management, SD-WAN ensures that critical applications get the bandwidth and performance they need. It can also seamlessly failover to alternative paths if one link experiences degradation, ensuring uptime and minimizing disruptions.
How SD-WAN Can Maintain (or Improve) Service Levels
SD-WAN’s ability to intelligently manage multiple links allows organizations to maintain or even improve service levels compared to MPLS. By continuously monitoring network conditions such as packet loss, jitter, and latency, SD-WAN reroutes traffic through the best available path. In cases of congestion or failure, SD-WAN immediately shifts traffic to a backup link, preventing downtime.
For organizations concerned about quality, SD-WAN supports policy-based routing to ensure high-priority applications always receive the required bandwidth. With MPLS, bandwidth is often fixed, and upgrades are costly. SD-WAN, on the other hand, dynamically allocates resources based on current needs, making better use of available capacity and maintaining service quality.
QoS (Quality of Service) and Application Performance Management
SD-WAN incorporates Quality of Service (QoS) features that ensure performance for critical applications. It can classify and prioritize traffic, ensuring that high-priority applications like VoIP or video conferencing always receive the bandwidth they need. SD-WAN also provides real-time application performance management, allowing IT teams to set policies and define thresholds for acceptable performance, automatically adjusting routing as needed.
By offering end-to-end visibility into network performance, SD-WAN empowers IT teams to detect and address issues before they impact service levels. This proactive approach to performance management ensures uptime, improves the user experience, and helps organizations meet their SLAs.
Improving WAN Agility and Flexibility with SD-WAN
Benefits of Software-Defined Networking for Cloud and Remote Workforces
The rise of cloud computing and remote work has placed unprecedented demands on enterprise networks. MPLS, with its fixed circuits and hub-and-spoke architecture, struggles to support the fluidity required by modern businesses. SD-WAN addresses this challenge by offering software-defined networking (SDN) capabilities that decouple network control from hardware, enabling businesses to scale their networks as needed.
SD-WAN provides direct, secure access to cloud services from any location, bypassing the need for backhauling traffic through a central data center. This is especially beneficial for remote workers who need fast, reliable access to cloud applications from anywhere, whether it’s a home office or a branch location. SD-WAN’s ability to provide secure, reliable connections from any point enables organizations to support flexible working arrangements while maintaining performance.
Faster Deployments and Easier Management
SD-WAN’s centralized management makes network deployment and configuration significantly easier than with MPLS. Instead of managing each branch’s network devices separately, IT teams can configure, monitor, and manage the entire WAN from a single, unified dashboard. This approach reduces complexity and the time required to deploy new locations, making it easier to expand the network as the business grows.
The flexibility of SD-WAN allows organizations to spin up new sites in a matter of hours, compared to the weeks or months it takes to provision MPLS circuits. This speed and simplicity make SD-WAN ideal for businesses that need to rapidly scale their networks or support temporary sites, such as retail pop-up stores or project-based locations.
Dynamic Routing and Automated Traffic Management for Better Agility
One of SD-WAN’s core strengths is its ability to automatically manage and route traffic based on real-time network conditions. By monitoring network performance metrics like latency, jitter, and packet loss, SD-WAN can dynamically choose the best path for each type of traffic. This automated traffic management ensures that mission-critical applications always receive the highest-quality connection, while less-sensitive traffic can be routed over more cost-effective links.
SD-WAN’s agility also extends to its ability to support multiple transport types, including MPLS, broadband, LTE, and 5G. This flexibility allows organizations to create a highly resilient network that can adapt to changing conditions, automatically rerouting traffic as needed to maintain optimal performance.
Achieving Enterprise-Grade Security with SD-WAN
Built-in Security Features of SD-WAN (Encryption, Segmentation)
One of the major advantages of SD-WAN is its ability to integrate enterprise-grade security features directly into the network. Most SD-WAN solutions offer built-in encryption to secure data as it traverses the WAN, protecting it from interception or tampering. Additionally, SD-WAN supports network segmentation, allowing organizations to isolate sensitive data and traffic from other parts of the network. This segmentation helps minimize the risk of lateral movement in the event of a security breach.
SD-WAN also enables secure access to cloud applications through encrypted tunnels, ensuring that remote workers and branch offices can connect securely without needing dedicated MPLS lines. This is especially important as more organizations adopt cloud-first strategies, requiring secure, direct access to SaaS applications like Office 365, Salesforce, and others.
How SD-WAN Supports Zero Trust Security Models
Zero Trust security models, which assume that every network connection is potentially hostile, are becoming increasingly popular as organizations seek to strengthen their defenses against cyber threats. SD-WAN is well-suited to support Zero Trust by enabling granular control over network traffic, enforcing policies at the application level, and providing real-time visibility into network activity.
SD-WAN can also integrate with identity and access management (IAM) systems to authenticate users and devices before granting access to network resources. By combining this authentication with continuous monitoring and threat detection, SD-WAN enables organizations to implement Zero Trust principles across their WAN infrastructure, ensuring that only authorized users and traffic can access critical resources.
Integrating Security with Cloud-Native Firewalls and Other Solutions
Another key advantage of SD-WAN is its ability to integrate with cloud-native security solutions like next-generation firewalls (NGFWs), Secure Access Service Edge (SASE), and intrusion detection/prevention systems (IDS/IPS). These integrations provide an additional layer of security, protecting against threats like malware, ransomware, and phishing attacks.
SD-WAN’s centralized management also allows IT teams to enforce consistent security policies across all locations, ensuring that even remote offices or branch locations are protected by the same set of security measures. This unified approach reduces the complexity of managing disparate security solutions across a geographically diverse network. By having a single pane of glass for visibility and control, organizations can respond more quickly to potential threats, enforce compliance policies, and maintain a strong security posture regardless of where users or devices are located.
Moreover, as threats continue to evolve, integrating security features into SD-WAN allows for regular updates and patches to be applied seamlessly, ensuring that security measures are always up to date without requiring extensive downtime or manual intervention. This proactive approach to security enhances resilience against cyber threats, providing organizations with the confidence they need to embrace digital transformation and cloud-based strategies without compromising on security.
What to Consider Before Renewing MPLS Contracts
Cost-Benefit Analysis: MPLS vs. SD-WAN for Your Business Needs
Before renewing MPLS contracts, organizations should conduct a comprehensive cost-benefit analysis comparing the long-term value of MPLS against the advantages of adopting SD-WAN. While MPLS has traditionally provided reliable performance and security, the rise of SD-WAN offers a compelling case for reevaluation. Organizations should consider their specific needs, such as bandwidth requirements, application types, and the geographical distribution of their workforce.
This analysis should include a detailed examination of current costs associated with MPLS, including circuit charges, maintenance, and potential downtime. In contrast, businesses should assess the cost savings potential of SD-WAN, including the ability to utilize lower-cost internet connections and the elimination of some MPLS expenses. Additionally, factors such as improved agility, scalability, and the ability to support cloud applications should also be considered. Ultimately, organizations should weigh the potential savings and increased flexibility of SD-WAN against their specific performance and security requirements.
Evaluating Long-Term Network Strategy and Growth
As organizations plan for the future, evaluating long-term network strategy is crucial. Companies should consider their growth projections, digital transformation initiatives, and the need for flexible network solutions that can easily scale. SD-WAN supports rapid expansion and agile deployments, making it an attractive option for organizations that anticipate growth or need to respond quickly to changing market conditions.
Furthermore, businesses should assess their cloud migration strategies. If a significant portion of their applications is moving to the cloud, a hybrid approach that combines MPLS for critical functions and SD-WAN for cloud access may offer the best balance of performance and cost. Engaging stakeholders across the organization to understand their networking needs will provide insights into how the network must evolve to support future initiatives.
Vendor Negotiations and Flexibility in Contracts
Negotiating with vendors is another critical consideration before renewing MPLS contracts. Organizations should explore options for flexibility in their agreements, including the potential for scaling bandwidth without significant penalties or the ability to introduce new services as needed. Given the changing landscape of networking solutions, many providers are now offering more adaptable contract terms, allowing businesses to pivot towards SD-WAN or other technologies without being locked into long-term MPLS commitments.
During negotiations, organizations should also look for opportunities to bundle services, such as SD-WAN and security solutions, to achieve better pricing and integrated support. Additionally, considering the vendor’s reputation, service levels, and ability to support the organization’s unique requirements is essential in ensuring that the selected provider can meet both current and future networking demands.
Importance of Assessing WAN Requirements Before Renewal
Before renewing MPLS contracts, organizations must thoroughly assess their WAN requirements. This assessment should include current and projected traffic patterns, application usage, and user distribution across various locations. Businesses should also evaluate their security requirements, especially as cyber threats continue to evolve.
Understanding these factors will help organizations determine the most appropriate networking strategy, whether it involves continuing with MPLS, transitioning to SD-WAN, or implementing a hybrid approach. This thorough analysis will enable companies to make informed decisions that align with their operational needs, budget constraints, and future growth plans.
Future Outlook: A Hybrid Approach to Networking
The Role of MPLS in a Hybrid SD-WAN Environment
As organizations increasingly adopt SD-WAN solutions, the role of MPLS is evolving. Instead of being the sole backbone of enterprise networking, MPLS is often being integrated into hybrid WAN environments, where it works alongside SD-WAN to enhance performance, security, and reliability. In this hybrid model, MPLS is typically reserved for mission-critical applications that require guaranteed performance and low latency, such as VoIP, video conferencing, and point-of-sale systems.
By complementing MPLS with SD-WAN, organizations can achieve a more cost-effective and flexible network that meets the diverse needs of modern business. This approach allows companies to optimize their network resources, utilizing broadband for less critical traffic while maintaining MPLS for high-priority applications.
Planning for Long-Term Network Evolution
Organizations must plan for long-term network evolution by embracing technologies that support their business goals. As digital transformation continues to reshape the enterprise landscape, networks must become more agile and responsive. A hybrid approach that combines the reliability of MPLS with the flexibility of SD-WAN allows businesses to adapt to changing demands, whether it’s increasing bandwidth for cloud applications or adjusting to new security threats.
IT leaders should also consider how emerging technologies like 5G and IoT will impact their networking strategies. As these technologies gain traction, they will introduce new requirements for network performance, scalability, and security. Organizations must be prepared to evolve their WAN strategies accordingly, ensuring they can leverage the benefits of next-generation technologies while maintaining a strong foundation with their existing infrastructure.
How to Ensure Scalability, Security, and Cost-Efficiency
To ensure scalability, security, and cost-efficiency in a hybrid networking environment, organizations must adopt a strategic approach. First, they should leverage SD-WAN’s capabilities to gain visibility into network performance, allowing for real-time adjustments to optimize traffic routing and resource allocation. This visibility will help organizations identify trends and proactively address performance issues before they impact users.
Next, businesses must implement robust security measures that extend across both MPLS and SD-WAN environments. This includes integrating security solutions like cloud-native firewalls and threat detection systems to create a cohesive security posture. By adopting a Zero Trust security model, organizations can minimize risk and ensure that only authorized users can access critical resources.
Finally, regular evaluations of the networking strategy will help organizations maintain cost-efficiency. By continually assessing their network performance, application needs, and user demands, companies can make informed decisions about resource allocation, helping to reduce unnecessary expenses while maximizing the value of their investments.
Conclusion
The transition from MPLS to a more modern networking solution is not just a cost-cutting measure; it’s a strategic imperative for organizations looking to thrive in a rapidly evolving digital landscape. As businesses face mounting pressures from escalating costs, the need for enhanced agility and superior service levels has never been more critical. Embracing SD-WAN and Secure Access Service Edge (SASE) technologies positions organizations not only to slash their networking expenses but also to enhance their operational responsiveness and security posture. This transformation allows for optimized traffic management and improved user experiences, essential in today’s hybrid work environments.
Companies that recognize the importance of this shift will be better equipped to meet their long-term objectives and adapt to changing market demands. By proactively evaluating these innovative solutions, organizations can create a robust network infrastructure that aligns with their future growth strategies. The convergence of cost efficiency, agility, and security in networking not only benefits the bottom line but also fosters a culture of resilience and adaptability. Ultimately, investing in a transformed WAN is not just an option; it’s a pathway to sustainable networking and security success in an increasingly competitive business environment.