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Why does MPLS still exist?

Flexible rollouts. Competitive costs. Customisable connections. Doesn’t the business case for WAN over internet sound straightforward?

Yet some organisations seemingly doubt business internet will be their sole source of connectivity in three-years’ time … or even their major one. Even with the benefits of MPLS nosediving and those of SD-WAN rising exponentially, many companies plan to keep MPLS in place for now. Why? After all, these are experienced people, with valid opinions.

The answer involves a bit of out-of-the-MPLS-box thinking, and a story or two from business school. So in this blog, let’s look at why MPLS still holds sway in the enterprise … and why this won’t be true forever.

Technology moves fast. But human acceptance of it? A little slower. And that’s true whether you’re a tech-phobic CEO, or a CIO obsessed with speeds-and-feeds. MPLS is a case in point.

With nearly two-thirds of global organisations still firmly reliant on the carrier-led service today (according to recent Omdia research), there must be reasons for remaining. We sum them up as: entrenched investment, uncertainty around switching, and The Innovator’s Dilemma. Let’s dive into these.

A chasm worth crossing

First up. When industries settle on a solution that works—and MPLS did, starting around 1998—there’s a disinclination to change, even when the newer solution makes better business sense.

Harvard’s Clayton Christensen made the point decades back, in “The Innovator’s Dilemma”; Geoffrey Moore’s “Crossing the Chasm” illustrated the problem further. In fact, pair those two books with Michael Porter’s “Five Forces” model of industry competitiveness, and you’ve got all you need to understand this issue in full.

But there’s a twist. Christensen and Moore showed that companies experiencing this dilemma—“in the chasm” between a proven-but-aging model and a promising-but-new one—make great gains if they take that leap of faith.

What’s more, the earlier they take it, the greater their chances of future success.

(By contrast, firms which don’t take the plunge tend to fade away. Because as the newer technology gains credence, the older technology they’re “stuck with” gradually performs worse, costs more, and takes more resources to maintain, making them less able to compete.)

So this is the most obvious reason companies are sticking with MPLS—at least for a while. But with the cost/benefit scenario leaning ever further in SD-WAN over internet’s direction, this argument won’t hold up much longer.

Natural risk aversity: if it ain’t broke …

IT managers have a passion for computers, software, the internet. So it might sound odd that many are conservative in their actual technology choices. When you dig deeper, the answer appears.

CIOs know how fast technology changes. Every IT professional with a few decades of experience has made a decision they regretted at least once. Some remember the Great Wars over Token Ring and client/server; they’ve seen Big Iron rise and fall and—with data centres—rise again. And they’ve seen business connectivity go from analogue landlines to digital ISDN and ADSL, X.25 protocols to Asynchronous Transfer Mode and then MPLS. Internet-underlaid SD-WAN is another shift, and they are rightly careful.

In 2020, though, the answer seems clear. With millions of users working from home, the domestic broadband infrastructure has barely blinked, while the rise of web services has outsourced load management to data centres and other experts. Today’s internet capacity, via one ISP or many, provides plenty of redundancy—while the right partner (that’s us!) can build in SLA-level protections equivalent to MPLS or DIA without the cost. And given the events of 2020, maybe—just maybe—the MPLS model is “broke”?

One last point: we asked network leaders, who have already experienced internet-based WANs, if they were satisfied with this change: 98% are happy (incl. 61% who are extremely happy!). [source: Omdia research]

Sunk costs: the pain in the “rip” of rip-and-replace

There’s no denying MPLS carries a lot of sunk costs. High setup fees, complex configurations, large volume of infrastructure at your sites. (After all, that’s what MPLS is good at: connecting owned infrastructure across borders, like your server rooms spanning New York, Dubai, and London.) It’s a hard decision to write down that sunk cost to zero.

But not that hard:

“Switching away from MPLS isn’t like writing off an investment—it’s more like reducing that investment’s end-of-life costs.”

Just as a factory plans for depreciation and scrappage costs when a machine becomes obsolete, enterprises are learning to do the same for each technology paradigm as its time in the sun passes. Of which MPLS is one.

Head in the clouds: not everything’s there yet

Another reason is more practical. Not all application environments are moving to the cloud. There’s a long tail of legacy applications, in-house databases, proprietary software. (Don’t forget plenty of banking software is still written in FORTRAN, a language dating to the 1960s.)

Again, this is costly to migrate—which means it’s another valid reason to stay with your existing infrastructure. The bright side? While MPLS carried huge setup costs, SD-WAN over internet generally doesn’t. And you don’t have to move to it in one go.

See: Five years of SD-WAN stories, five take-aways.

This means every MPLS enterprise can start looking at the internet alternative today without risks, while planning to phase out MPLS over a period of years if needed. Switching from MPLS to internet is not an all-or-nothing endeavour.

Guaranteed performance: when SLAs are all

A final point. MPLS retains an excellent reputation for performance. And for some applications, such as real-time financial ones, that’s non-negotiable. One reason the relationship between large banks and national telcos is so entrenched.

What’s changed in recent years is the sheer availability of public infrastructure. Millions of miles of wires and glass, world-girdling webs of bandwidth in the air, much of it with five-nines uptime and huge capacity. And this isn’t some future promise. It’s all there today, ready for businesses to take advantage of.

Yes, MPLS has capacity and availability. But these days, so does business broadband.

Summing up: all the reasons to stay with MPLS are valid… for now.

Even today, an IT manager can make a reasonable argument for MPLS, just as they once remarked “Nobody ever got fired for buying IBM.”

But the arguments are fading. Just as the case for business internet is rising. Maybe the right question is not why does MPLS still exist, but until when will it exist.

A well-chosen ISP aggregator, such as Globalinternet, now part of Expereo, can provide non-contended business broadband connectivity with availability and Service Level Agreements as strong as a national carrier’s MPLS—and do it for a far lower cost.

So while MPLS is still around, and will be for a few more years, the future of your VPN or WAN depends on a solid internet underlay. At Globalinternet, we’re creating that new narrative—with over 600 organisations discovering the benefits of business broadband. And we’re looking for the next 600.