Many companies today have the need to connect to multiple business locations. The legacy technologies for doing this were Frame Relay networks and point to point dedicated circuits. But newer MPLS networks now offer a lower cost higher performance way to send data, voice or video between locations.
MPLS stands for Multi-Protocol Label Switching. It's yet another Telecom acronym that basically describes a privately operated network that allows for carefully controlled connection paths between locations. You can have a connection between two locations across your town/ city or from the East Coast to the West. Or you can set it up to allow any of a dozen or a hundred locations communicate with any of the others at will. Because it's multi-protocol, MPLS networks can handle nearly any type of digital traffic you can generate including VoIP and TDM telephone, IP video, and packet data.
The rapid growth of the Internet has been attractive to many companies for transporting voice and data traffic. Internet based VPNs or Virtual Private Networks have the advantage of using a public infrastructure with costs that are shared with millions of users. But therein lays the problem- because it is a public means of access, there is no way to guarantee quality or consistency of service. A private network has inherently better security and can be structured to guarantee important parameters such as bandwidth, jitter, latency, and packet integrity. The newer MPLS networks tend to be designed for higher speeds to match today's business bandwidth needs, unlike Frame Relay Circuits, which were based on older, slower technology.
The other traditional means of connectivity mentioned which is still a viable alternative is the point to point solution; Point to point means just that. You have a dedicated line of a certain bandwidth between point A and point B. If you need to add another location, point C, you have to connect it with two PTP (Point to Point) connections. One goes from C to A. The other goes from C to B.
Unfortunately, this can get expensive fast and a logistical challenge when you try to connect a dozen or a hundred locations; and in most cases, its distance sensitive so it can get pricey real fast.
It's become popular to think of large networks as clouds. Data goes in one point of the cloud and comes out another. The magic of how it gets from input to output is in the cloud technology. MPLS makes a perfect cloud for transporting text, images, streaming video, data backups and whatever among locations. The label switching technology tags the input packets with their source, destination and quality of service requirements. Tag switches or label routers then efficiently get that packet to its destination intact.
Since the cloud is a private network, you have the advantage of a carefully managed service that gives you the quality you want. You have the costs of transport between location and the access cost, which is generally a T1 line at each location. In addition, it is scalable so that when your company grows the bandwidth can increase as well. The rapid growth of MPLS networks can be attributed to the same or higher performance than other transport solutions, but at much lower cost.