How to cut communications costs by replacing leased lines and

in association with
How to cut communications costs
by replacing leased lines and
VPNs with MPLS
March 09
End of the line for leased lines and IPSec VPNs
as MPLS comes of age
Executive summary
What is Multi Protocol Label Switching?
How MPLS can deliver “virtual leased lines”
Benefits of MPLS versus legacy leased lines
When should leased lines be retained?
Choosing an MPLS provider
Executive summary
For most UK businesses of any size, the network is the most important piece of their
corporate infrastructure. With internationalisation now commonplace, wide area
networking (WAN) costs form a major, if not the major, part of most firms' communications
While recent years have seen a steady migration from relatively expensive and inflexible
point-to-point leased lines to IP-based network solutions, a substantial volume of leased
lines remains in use. Replacement of these last legacy internet connections with more
flexible and secure solutions such as Multi Protocol Label Switching (MPLS), which offer
guaranteed security and quality of service, can save organisations substantial amounts of
What is Multi Protocol Label Switching?
For an enterprise looking into connecting multiple, geographically dispersed sites via WAN
technologies, it used to be that there were a baffling array of options. Dial-up circuits,
dedicated point-to-point, frame relay, ATM, SONET and Ethernet to name several. All these
technologies had various strengths and weaknesses depending on the traffic types
transmitted over them and requirements for security, latency and reliability.
To this end, leased lines, sometimes known as a private circuit, become a common way of
establishing a symmetric, permanent data link between two locations. Leased lines can be
used for telephone, data or internet services, and provide guaranteed bandwidth between
geographically distant locations.
But whereas in the past a handful of different technologies emerged, such as frame relay
and ATM, which essentially had the same goals in mind, MPLS has evolved to bring all these
technologies into one stable, playing to the strengths and negating the weaknesses of each
of them.
MPLS is a packet switched, data carrying network technology that can be used to transport
many different kinds of traffic, including IP packets, as well as native ATM, SONET and
Ethernet frames. MPLS actually replaces many protocols, such as ATM, with a solution that
requires less overhead, while providing connection-oriented services for variable-length
frames. As a result, many analysts anticipate that MPLS will completely replace these
aforementioned technologies in the future.
MPLS operates on a network layer that is generally considered to lie between the data link
layer and the network layer. To this end it is sometimes referred to as a 'Layer 2.5' protocol,
able to forward data relevant to both Layer 2 applications, such as Ethernet frames, and
Layer 3 applications, such as IP packets.
It is this position between the two layers that allows MPLS to run different types of traffic
over the same network at the same time, such as data, audio and video. As a traffic
management tool, MPLS is becoming increasingly important for the successful deployment
of time- and latency-sensitive communication applications, as well as for business-critical
applications like server redundancy.
In many situations MPLS is used to speed up the flow of traffic on a network by making
better use of the available paths. The technology is termed 'multiprotocol' because it can
be used with any Layer 3 network protocol, although IP is fast becoming the dominant
The label switching part of the technology comes from its ability to eliminate all routing
decisions from one side of the network to the other. Short labels are applied to each packet
at the network edge, and all subsequent routing decisions are then made based on the
label and not the full packet header, which improves efficiency and the speed of delivery,
and goes some way to reducing bottlenecks.
Each application can be categorised in ascending priority, for example: standard (such as
email and http); advanced (for higher priority data such as office applications); critical
(designed for business-critical applications such as ERP or CRM); multimedia (for
applications such as video conferencing); and real-time (designed for voice traffic which
needs to be allocated the highest priority to ensure transmission quality).
How MPLS can deliver “virtual leased lines”
In terms of flexibility, MPLS networks can also be used to build virtual leased line services,
and provide connectivity regardless of the physical connections available at each site. An
MPLS customer could potentially connect to the network with frame relay at one site and
Ethernet at another.
Essentially, MPLS is a leased line equivalent aimed at enterprises that require a reliable,
secure private network over which to run bandwidth-hungry applications. MPLS is often
used for mission-critical applications such as VPNs, voice-over-IP (VoIP) and finance tools
dependent on bandwidth and fast connection speeds. It is also dynamic in terms of a
granularity of bandwidth provision that is not available with legacy leased lines. For
example, customers could incrementally increase their bandwidth requirements just by
picking the phone up and talking to their provider.
As with any full managed service, MPLS comes with a host of other benefits in the shape of
value-added services. These typically include internet connectivity, hardware, specialist
personnel and skills, 24/7 support and, most importantly, guaranteed deliverables via the
Service Level Agreement (SLA).
Benefits of MPLS versus legacy leased lines
Enterprises have traditionally relied on leased lines to connect geographically dispersed
sites, either using virtual private networks (VPNs) across the internet, or point-to-point
leased lines. But this legacy solution is relatively inflexible, and firms often have to pay
substantial costs for relatively little bandwidth compared with the solutions offered by next
-generation IP-centric MPLS networks.
The main benefits of MPLS are centred on better performance at a lower total cost of
ownership, bolstered by greater flexibility, easier expansion and better security. It almost
goes without saying that reliability will be better, because you will receive all MPLS circuits
through a single carrier, and experience less complication with tunnelling and firewall
Quality of Service (QoS) and priority queuing improves network efficiency by telling it which
traffic is the most important. A significantly lower rate of packet loss also means faster
response times for many latency-sensitive applications, while the fully meshed nature of
MPLS eliminates the single point of failure that occurs with leased line systems.
MPLS not only allows you to consolidate your network into a single, enterprise-wide view
of your company infrastructure, it greatly simplifies network management and reduces
technology disparity. An added bonus of this consolidation is the future-proofing of the
network architecture giving your business greater agility. In fact, some estimations go so far
as to suggest that a company can reduce its WAN operational expenditure by as much as
50 per cent by adopting an MPLS strategy. One of the biggest savings will be associated
with removing hardware such as firewalls and VPN equipment at network sites in branch
offices, with substantial cost savings derived from no longer having to provide support for
this remotely hosted equipment.
Small and medium enterprises that would benefit most from MPLS adoption are those
Require QoS
Have a number of separate or widely dispersed office locations that need interconnectivity
to share data
Are thinking of deploying VoIP companywide to cut the cost of calling between office sites
Have bandwidth-hungry applications that need to be accessed from different sites
Are trying to cut the cost of an existing leased line model
What advantages does MPLS offer?
A cost effective method for connecting business sites that are geographically separate
A scalable and flexible platform for future expansion
High QoS delivered via the SLA
Predictable costs
In its latest Ethernet and IP MPLS VPN Services report, industry analyst Infonetics Research
reveals that organisations around the world are increasingly replacing their legacy frame
relay, ATM and private line legacy services with Ethernet and IP MPLS VPN services. In
2007, the company found that IP MPLS VPN service revenue worldwide grew 20 per cent to
$13bn and is forecast to grow strongly through to 2011.
Customer demand and IP and next-generation network transformation projects are the two
biggest factors contributing to the growing popularity of IP MPLS VPN services, Infonetics
said. And companies mainly like these services because they offer considerably more
bandwidth with little or no increased WAN costs compared to their legacy counterparts,
including frame relay, ATM and leased lines.
The Europe, Middle East, and Africa region accounted for over one third of worldwide IP
MPLS VPN service revenue in 2007, the analyst said.
With the advent of MPLS, the writing is on the wall for branch VPNs, with firms increasingly
seeking to simplify infrastructure complexity and remove expensive legacy hardware-based
VPN platforms, as well as difficult-to-support software-based alternatives, by using MPLS to
deliver a single breakout to the internet.
This is mainly because MPLS can provide all the services a branch VPN can, as well as a
whole host of other features, and do the job more efficiently and cheaper. MPLS supports
VPN, providing inherent security and separation of traffic for all customers, as well as
support for differential QoS levels to address the specific requirements of customer
MPLS can deliver enhanced flexibility, allowing customers to benefit from being able to
choose IP-based technologies including DSL broadband and Ethernet services to provision
links into the WAN MPLS core, as well as supporting easy and flexible deployment of
branch offices and new network sites.
Customers can rest assured that MPLS can offer enterprise-class reliability backed up by
Class of Service (CoS) and QoS guarantees. The circuit can be configured to enable different
voice and data network traffic to be differentiated and prioritised by application - so for
example business critical applications such as ERP or CRM can be given priority.
Hand in hand with CoS capabilities is the granularity MPLS of bandwidth features, allowing
users to take advantage of provisioning capabilities not available with legacy leased lines,
which are tied to relatively rigid bandwidths, together with costly upgrade paths, for
example from an E1 to E3 or DS-3.
Industry-leading security is a prerequisite of enterprise deployments, and in terms of
security, MPLS can be considered comparable with legacy Layer 2 transmission network
technologies like ATM or frame relay. All MPLS solutions are built around 'zero hop'
architectures so there can be no possible attack point for interception of the IP packets.
It is worth remembering, however, that while the MPLS network is private, it can be
connected to the internet if you choose, but your traffic on it will not be encrypted. On the
other hand, compared to internet-based connections such as IPSec VPNs, MPLS wins hands
down in terms of security because it's run through a private network, whereas a VPN is
open to internet threats at the gateway, or perhaps via a flawed or misconfigured firewall.
When should leased lines be retained?
For some organisations, especially large corporates, there are inevitably some missioncritical operations, core to a business, where the very high availability of a leased line, or
dual leased lines would be required. Companies operating in the financial services industry
might be one example. But for many scenarios this ultra high availability is not a businesscritical requirement and the cost savings from a DSL line running into an MPLS
infrastructure are very attractive.
But while it is generally acknowledged that the economic and traffic management benefits
of migrating to MPLS are clear, with the technology delivering measurably better reliability
and performance, some enterprises may also be put off by the lack of visibility into the
MPLS 'cloud'.
Choosing an MPLS provider
Of course, as with any managed service, monitoring and reporting tools are of crucial
importance because MPLS gives you less direct visibility into how your network services are
being run. Online reporting allows you to truly see what is happening on your network so
that you subscribe only to the bandwidth that you really need. Being able to see this key
information on network and service performance also ensures that the services are
performing against SLAs, as well as allowing you to account for network traffic, engage in
network capacity analysis and planning, monitor QoS and SLAs, detect irregular usage and
denial-of-service attempts, monitor mission-critical and bandwidth-intensive applications,
as well as monitor general network performance.
At the heart of any managed services deal such as an MPLS network is the SLA, which is
crucial to the success of any relationship with a service provider. Along with a thorough
reporting system and a single point of contact who is easy to get hold of, there should also
be a plan in place to allow the service provider to escalate things if and when required, as
well as an exit plan.
These requirements serve to highlight the advantage of a single SLA for all service
provision, as well as the need to engage a provider that offers a 'real' SLA which reflects
technical reality.
Of course there are certain points that need to be addressed regarding the provider you
are considering before you sign a contract:
How credible is the partner?
What is the strength of the partner's service offerings?
How strong is the partner's customer service?
What SLAs need to be agreed?
What is the strength of the partner's underlying network infrastructure?
What steps must be taken to keep the relationship on track in the medium/long term?
What data security measures are in place?
MPLS is fast becoming the standard technology for implementing large-scale IP networks
across the WAN. With a strong engineering pedigree - it was originally created to improve
the performance of backbone networks - the technology's features and QoS have helped
the platform achieve widespread adoption.
But, while the technology is cutting edge, it also makes sound economic sense in that it can
often offer cost savings, enterprise-class security and improved functionality when
compared with legacy connectivity solutions such as leased lines.
Customer demand and IP and next-generation network transformation projects are the two
biggest reasons enterprises of all sizes are considering MPLS, mainly because they offer
considerably more bandwidth with little or no increased WAN costs compared to their
legacy counterparts, including frame relay, ATM and leased lines.
Essentially, MPLS is a leased line equivalent aimed at enterprises that require a reliable,
secure private network over which to run bandwidth-hungry applications. It is becoming
increasingly popular for mission-critical applications such as VPNs, VoIP and finance tools
dependent on bandwidth and fast connection speeds. It is also dynamic in terms of
granularity of bandwidth provision that is not available with legacy leased lines, and flexible
enough to replace legacy platforms such as ATM and frame relay.
About Star
Star provides on-demand computing and communication services to UK businesses. Utilising an advanced cloud computing platform, the
company has redefined how business people use and pay for the technology that supports them. Star’s on-demand business services are
easy to use and pay for and are available any time and from anywhere, removing unnecessary costs for hardware, software and ongoing
Since being founded in 1995, Star has been an Internet technology innovator and pioneered the system for cloud based spam and virus
scanning for business email that became MessageLabs. In the last 14 years Star has established itself as a leading IT and communications
service provider of the highest pedigree looking after 3,500 UK business customers and their 500,000 users.
Star has UK based data centres that sit within a network and communications capability that forms the basis of the Star Platform, from which
a wide range of computing and communication services are delivered to customers. Star has over 250 employees working from offices
throughout the UK, providing the highest levels of customer service and support. Star’s technology roadmap will deliver on-demand, cloud
computing services to UK businesses who want immediate access to the latest enterprise technologies. For more information please go to:
Star Offices
1230 Arlington Business Park
Brighouse Court, Barnett Way
Unit T4, Quay Plaza One
40 Whitfield Street
Theale, Reading, Berkshire
M50 3BA
Star is the trading name of Star Technology Ltd., a Company Registered in England No. 3077786. Brighouse Court, Barnett Way, Barnwood, GL4 3RT. VAT No. 810943641
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