How it works
MPLS development goes back more than a decade, when researchers began to experiment with ways to bring the speed of hardware-based switching to software-based routing. MPLS evolved from numerous prior technologies, including Cisco's "Tag Switching," IBM's "ARIS," and Toshiba's "Cell-Switched Router." Official standards work on MPLS began in the Internet Engineering Task Force in 1997.
The main advantage of label switching is that it allows routers to make forwarding decisions based on the contents of a simple label, rather than by performing a complex lookup based on a so-called destination IP address.
In an MPLS network, incoming packets are assigned a "label" by a router. Packets are forwarded along a label switch path where each router makes forwarding decisions based solely on the contents of the label. At each hop, the label is stripped off and a new one is added that tells the next router how to forward the packet.
In many ways, the label switched paths of MPLS are no different than circuit-switched paths in traditional telecommunication technologies such as ATM (Asynchronous Transfer Mode) or Frame Relay networks. The main difference is that MPLS paths are not dependent on a particular transport technology. This means that MPLS can be used with any transport technology including ATM, Frame Relay or Ethernet. Thus, one of the true promises of MPLS is the ability to create end-to-end circuits across any type of transport medium, eliminating the need for overlay networks.
Carriers already use MPLS for a variety of purposes such as to guarantee a certain level of performance, to route around network congestion, and to create IP tunnels for network-based virtual private networks.
Because MPLS can separate traffic into different tunnels, carriers can use it to provide VPN services. Carriers already offer point-to-point VPNs using Frame Relay, ATM and IPSec, an IP-based encryption and tunnelling mechanism. MPLS will allow them to offer a new meshed service.
MPLS VPNs are ideal for global companies that are looking to launch new services like VoIP. Unlike Frame Relay, which is often set up in a hub and spoke configuration, MPLS VPNs allow companies to link locations together directly. When a voice call is made using an MPLS VPN, packets can be routed directly between locations, reducing latency. This provides better quality calls, while also making more efficient use of the company's bandwidth.
As MPLS VPNs continue to be used and carriers move their backbones to MPLS, IP routing vendors such as Cisco and Juniper could benefit. Cisco chief executive John Chambers told analysts and investors during the company's latest earnings conference call that he is already seeing demand for high-end IP routers growing as carriers shift spending away from traditional telecom gear to IP products. Demand for the company's high-end MPLS router grew 50 percent in the second quarter of fiscal 2004 from the same period a year earlier.
Traditional telecom vendors realise they need to incorporate MPLS into their product portfolios. Several large companies have acquired smaller start-ups with MPLS technology. For example, in the spring of 2003, Alcatel bought IP edge routing upstart TiMetra, and Tellabs bought MPLS switching start-up Vivace Networks. Other telecom gear makers have partnered with MPLS vendors. Lucent Technologies has partnered with Juniper, and Nortel has partnered with IP routing vendor Avici Systems.
Carriers are being driven to offer these new services by customer demand, according to experts.
"Customers want more flexibility in how they connect to their service provider," said Jim Daugherty, product director of MPLS VPNs for AT&T. "It's a combination of wanting to converge more services on their own networks and the any-to-any connectivity, which translates into operational savings."
