SD-WAN vs MPLS: Detailed Comparison of Features & Costs

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Multiprotocol Label Switching (MPLS) has been a cornerstone of enterprise networking, offering reliable performance through private, dedicated circuits. It provided the security and stability businesses needed to run critical applications across multiple locations. However, the increasing demands of cloud integration, scalability, and cost-efficiency have exposed its limitations.

Managed SD-WAN emerges as a strategic solution designed to effectively address these challenges head-on. Unlike MPLS, SD-WAN leverages centralised control, dynamic traffic routing, and cloud compatibility to optimise network performance while reducing costs. Its ability to adapt to modern operational needs has made it a preferred choice for organisations looking to upgrade their infrastructure. 

This blog provides a detailed comparison of SD-WAN vs MPLS, examining their features, costs, and benefits. Whether you’re seeking scalability, improved performance, or cost savings, understanding the difference between SD-WAN and MPLS is key to choosing the right networking solution.

SD-WAN vs MPLS: Feature Comparison 

Multiprotocol Label Switching (MPLS) is a networking technology that uses labels to direct data packets along predetermined paths. Unlike traditional routing, where packets are individually analysed at every hop, MPLS establishes private circuits that ensure reliable and consistent performance. This approach minimises latency and provides predictable data delivery, making it ideal for critical business applications. 

Why MPLS became the standard 

MPLS gained popularity because of its ability to deliver high reliability, strong performance guarantees, and security. By bypassing the public internet, MPLS created a private network environment that shielded businesses from common connectivity issues like congestion and packet loss.  

For large enterprises with geographically dispersed branches, MPLS offered seamless communication and robust service-level agreements (SLAs), which were unmatched by earlier networking technologies. 

Limitations of MPLS 

Despite its strengths, MPLS comes with significant drawbacks. High costs are one of its most notable challenges, as private circuits and long-term contracts often strain IT budgets.  

Additionally, MPLS lacks flexibility—it cannot easily adapt to the growing demands of cloud-based applications or rapidly changing business needs.

The configuration process is complex, and responding to new requirements, such as scaling or integrating remote locations, can be time-consuming and expensive. 

Managed SD-WAN: The smarter way to network 

Managed SD-WAN is a next-generation networking solution that optimises connectivity by using a software-defined approach. Unlike traditional WANs, it centralises control, automates traffic management, and integrates seamlessly with cloud-based environments.  

Key features include dynamic path selection, application-aware routing, and real-time analytics, ensuring optimal performance for critical business applications. 

Why choose Managed SD-WAN? 

Outsourcing SD-WAN management to an experienced provider brings simplicity, security, and expertise. A Managed SD-WAN service removes the complexities of setup, monitoring, and maintenance, allowing businesses to focus on their core operations. Providers also offer advanced security measures and 24/7 support, ensuring consistent network performance and quick resolution of issues. 

Key Components of Managed SD-WAN 

Managed SD-WAN integrates critical networking components into a single, unified solution. This includes built-in security features such as encryption and next-generation firewalls, application-aware routing to prioritise traffic based on business needs, and full compatibility with cloud infrastructures. These elements work together to create a flexible, scalable, and secure networking environment tailored for modern enterprise demands. 

Cost comparison: Managed SD-WAN vs. MPLS 

Understanding the financial implications of MPLS and Managed SD-WAN is essential for businesses aiming to optimise their networks. While MPLS has long been the standard for reliable enterprise connectivity, its high costs often outweigh its benefits in today’s dynamic business landscape. 

• The cost of MPLS 
  MPLS (Multiprotocol Label Switching) relies on private circuits, which are significantly more expensive than public internet connections. These leased lines come with long-term contracts, typically ranging from three to five years, locking businesses into inflexible agreements. Additionally, scaling MPLS networks incurs substantial costs, as new sites require dedicated circuits and hardware installations. These factors, combined with ongoing maintenance expenses, make MPLS a costly option for businesses looking to expand or adapt to modern networking needs. 
  
  
• The cost of Managed SD-WAN 
  

  In contrast, Managed SD-WAN offers a far more cost-effective alternative. By leveraging existing broadband or LTE connections, SD-WAN eliminates the need for expensive private circuits. Its flexible pricing models allows businesses to optimise costs and usage based on their actual needs. Additionally, SD-WAN reduces hardware expenses by utilising virtual appliances and centralising management, further lowering operational costs. 

Setup Costs

• MPLS Setup
  The setup costs associated with MPLS (Multiprotocol Label Switching) are typically higher due to the necessity of installing dedicated circuits at each location. This process often involves significant investment in specialised hardware, which can be both costly and time-consuming. Additionally, the deployment of MPLS networks can take weeks or even months, as it requires careful planning and coordination with service providers. The long-term contracts that accompany MPLS installations further contribute to its inflexibility, locking businesses into agreements that may not align with their evolving needs.
  
  
• SD-WAN Setup
  In contrast, the setup costs for Managed SD-WAN are considerably lower. One of the key advantages of SD-WAN is its ability to leverage existing broadband or LTE connections, thereby eliminating the need for expensive private circuits. This not only reduces initial capital expenditure but also allows for faster deployment, often achievable within days rather than weeks. Furthermore, SD-WAN solutions typically do not require proprietary hardware, which further diminishes setup costs and complexity.

Operational Costs

• MPLS Operational Costs
  When it comes to operational costs, MPLS tends to be more expensive. The high cost of bandwidth, particularly for high-capacity links, can place a significant financial burden on organisations. Moreover, the limited scalability of MPLS networks means that expanding capacity often requires substantial investments in additional infrastructure and dedicated circuits. The complexity of managing an MPLS network can also necessitate specialised IT personnel, adding to ongoing operational expenses.
  
  
• SD-WAN Operational Costs
  On the other hand, Managed SD-WAN offers a more cost-effective approach to operational expenses. By relying on lower-cost internet connections instead of dedicated circuits, businesses can achieve considerable savings on bandwidth. The simplified management model provided by SD-WAN—characterised by centralised control and automation—further reduces operational costs by minimising the need for extensive IT resources. Additionally, the ease of scalability inherent in SD-WAN solutions allows organisations to adapt quickly to changing business demands without incurring significant additional costs.

Total Cost of Ownership (TCO) 

Over a three-to-five-year period, SD-WAN consistently demonstrates a lower Total Cost of Ownership (TCO) compared to MPLS:

Year 1:

• MPLS: High initial setup costs, expensive bandwidth
• SD-WAN: Lower setup costs, immediate savings on bandwidth

Years 2-3:

• MPLS: Continued high bandwidth costs, limited flexibility
• SD-WAN: Increasing cost savings, improved performance through optimisation

Years 4-5:

• MPLS: Potential need for expensive upgrades or contract renewals
• SD-WAN: Continued cost savings, easy scalability for business growth

By year 2, large SD-WAN deployments typically see a return on investment. Over time, SD-WAN can reduce network costs by up to 50% compared to traditional WAN networks relying on MPLS.

How SD-WAN outpaces MPLS in flexibility and scalability 

Scaling networks efficiently is a priority for businesses aiming to grow. MPLS (Multiprotocol Label Switching) and Managed SD-WAN approach scalability and flexibility in fundamentally different ways, with SD-WAN emerging as the superior choice for modern enterprises. 

The challenges of MPLS scalability 

While MPLS is known for its reliability, it struggles with scalability. Expanding an MPLS network requires significant investments in infrastructure, such as leasing new private circuits and installing additional hardware.  

Each new site involves lengthy setup times and high costs, making the process cumbersome for businesses undergoing rapid expansion. Moreover, the rigid contracts and fixed bandwidth limitations of MPLS make it challenging to adapt to fluctuating demands or integrate cloud resources efficiently. 

How Managed SD-WAN overcomes MPLS limitations 

In contrast, Managed SD-WAN excels in flexibility and scalability. It leverages public internet connections, broadband, and LTE to enable quick and cost-effective network expansion. Adding new sites or branches is straightforward, thanks to features like zero-touch provisioning and centralised control.  

SD-WAN seamlessly integrates with cloud services, allowing businesses to scale operations without expensive overhauls or infrastructure delays. This adaptability empowers organisations to respond to market demands, seasonal spikes, or new business opportunities with agility. 

Consider a global retail chain with 150 stores looking to expand operations. With MPLS, adding even a handful of locations would involve months of setup and substantial financial investment. However, using Managed SD-WAN, the company could deploy new sites within days, reducing setup costs by up to 50%.  

The ability to prioritise traffic for cloud applications and remote management ensures consistent performance, even as the network grows. For businesses focused on rapid scaling, Managed SD-WAN is the clear choice. 

How SD-WAN optimises performance better than MPLS 

MPLS relies on static, predetermined routes to transmit data across the network. While this ensures stability for certain applications, it falls short when handling dynamic workloads or cloud-based services that require adaptive routing.  

The rigidity of MPLS traffic management often leads to increased latency and inefficiencies, especially in environments with fluctuating demands. 

Managed SD-WAN’s dynamic traffic routing 

Managed SD-WAN transforms traffic management by using real-time analytics to route data dynamically. By continuously monitoring network conditions, SD-WAN chooses the most efficient path—whether broadband, LTE, or other connections—ensuring consistent performance and reduced latency. Unlike MPLS, SD-WAN adapts to changing network demands, making it ideal for modern applications and multi-cloud environments. 

How SD-WAN’s security outperforms MPLS 

The security gaps in MPLS networks 

While MPLS is known for its reliability, its security architecture has limitations. MPLS relies on private circuits, which provide some level of isolation from public networks. However, it does not offer inherent end-to-end encryption or protection against evolving cyber threats.  

For enterprises dealing with sophisticated attacks or handling sensitive data, MPLS often requires additional third-party solutions to meet modern security needs. These add-ons increase costs and complexity without providing a holistic defence. 

Advanced security features of Managed SD-WAN 

Managed SD-WAN addresses these gaps with integrated, multi-layered security features: 

• End-to-End Encryption ensures all data travelling across the network is protected from interception, regardless of the underlying transport medium. 

• Next-Generation Firewalls block malicious traffic and provide advanced threat detection, safeguarding against vulnerabilities. 

• Zero-Trust Access verifies every user and device before granting network access, minimising insider threats and unauthorised access. 

• Cloud Security Integration extends protection to cloud applications, providing secure access for distributed workforces and ensuring consistency across hybrid environments. 

These built-in capabilities eliminate the need for costly external security solutions, making SD-WAN a more secure and cost-effective choice. 

Supporting compliance with SD-WAN security 

Meeting regulatory requirements such as GDPR or HIPAA is another area where Managed SD-WAN outshines MPLS. Its centralised control and visibility, combined with detailed reporting and audit trails, make compliance management seamless. In contrast, MPLS often lacks the flexibility to adapt to these regulations, requiring additional tools to bridge the gap. 

Managed SD-WAN delivers security, visibility, and compliance as a unified solution, enabling businesses to protect their networks while staying aligned with industry standards.

How SD-WAN cloud integration futureproofs your network 

Traditional MPLS networks were designed for an era dominated by data centres, making them less suitable for cloud-centric architectures. MPLS relies on fixed pathways, which means traffic destined for cloud services often needs to backhaul through centralised data centres, creating latency and inefficiencies. This approach hinders the performance of modern cloud-based applications and limits the scalability businesses now require. 

Why Managed SD-WAN excels in cloud integration 

Managed SD-WAN is built with the cloud in mind, enabling direct and secure access to public, private, and hybrid cloud environments. Unlike MPLS, SD-WAN allows businesses to connect to cloud services without the need for backhauling traffic through data centres, significantly reducing latency and improving application performance. 

Key features that make SD-WAN a superior choice include: 

• Dynamic Path Selection: Traffic is intelligently routed across the best-performing paths for cloud services, ensuring seamless connectivity. 

• Cloud Security Integration: Advanced features such as encryption and zero-trust policies protect data during cloud access. 

• Scalable Architecture: SD-WAN supports rapid integration of new cloud applications and resources without the need for extensive infrastructure changes.

Futureproofing with SD-WAN 

Managed SD-WAN is designed to support emerging technologies like IoT, 5G, and edge computing. Its adaptability ensures that businesses can evolve their networks to meet future demands without expensive overhauls. Unlike MPLS, which struggles to keep pace with technological advancements, SD-WAN provides the flexibility and scalability required for long-term success. 

For businesses embracing cloud-first strategies, Managed SD-WAN offers a seamless, secure, and scalable solution that positions them for growth in a digitally connected world. 

Real-world case-studies: MPLS vs. Managed SD-WAN 

Al Ghandi Auto Group reduced costs by 80% by switching to Managed SD-WAN 

Al Ghandi Auto Group migrated from MPLS to Orixcom Managed SD-WAN solution, achieving an 80% cost saving on MPLS expenses. This transition provided significant flexibility, real-time network visibility, and improved network management. By moving their SAP system to Azure with the help of Orixcom’s CloudConnect, they also reduced cloud connectivity costs by 90% and deployed the secure connection within a week, compared to months with MPLS. 

CNBC Arabia achieved 100% boost in performance with Managed SD-WAN 

For CNBC Arabia, switching to Orixcom's SD-WAN improved their media file transfers across bureaus. The previous setup faced frequent failures, causing significant delays in broadcasting. With SD-WAN, CNBC experienced a 100% boost in performance, ensuring successful file transfers every time and on-time delivery. This shift enhanced productivity, increased network flexibility, and provided real-time visibility across the region. 

Why Managed SD-WAN outshines MPLS

Managed SD-WAN stands out as the smarter choice for businesses looking to modernise their networks. Unlike MPLS, which comes with high costs and limited scalability, SD-WAN delivers cost savings by utilising affordable public internet and pay-per-use bandwidth. Its flexibility allows businesses to scale seamlessly, whether adding new sites or adapting to evolving demands. 

Performance is another area where SD-WAN excels. With dynamic traffic routing critical tools receive priority, ensuring minimal latency and uninterrupted operations. Security is built into the solution, with features like end-to-end encryption and zero-trust access safeguarding data across the network. 

Futureproofing is also a key strength of SD-WAN, as it integrates effortlessly with cloud environments and supports emerging technologies like IoT and 5G. For businesses looking to reduce costs, enhance performance, and maintain agility, Managed SD-WAN is the ideal solution to meet current and future networking demands. 

Why Choose Orixcom Managed SD-WAN?  

Choose Orixcom as your partner for a business-focused approach as well as:  

1. Comprehensive Solutions: Orixcom offers an all-encompassing suite of managed services, which includes not only the initial setup but also ongoing support. Our services feature complimentary installation, continuous monitoring to ensure system reliability and performance, precise policy configuration to align with your business objectives, detailed reporting for clear insights into your operations, and unwavering 24/7/365 support to promptly address any issues that may arise.
2. Human-Centric Approach: At Orixcom, we prioritise human interaction, ensuring that every engagement is personalised. Our team is committed to exceeding response time expectations, providing a human touch that reassures our clients and enhances their experience with us. This approach fosters trust and builds long-lasting relationships.
3. Trusted Expertise: Our team comprises seasoned professionals with a wealth of experience in leveraging technology to drive business growth. We maintain a deep understanding of the latest technological trends and apply this knowledge to help our clients achieve their goals efficiently and effectively.
4. Flexibility and Customisation: We recognise that each business has unique needs and challenges. Therefore, we offer services that are flexible and customisable, ensuring our offerings, pricing, and support are specifically tailored to meet the distinct requirements of your organisation.
5. Honest Communications: Integrity is at the core of our operations. We believe in transparent communication and handling even the most difficult conversations with honesty. Our commitment to integrity ensures that you are well-informed and confident in the decisions we make together.
6. Simplification of Complexity: Orixcom specialises in simplifying complex processes, allowing your business to focus on what it does best. By streamlining operations, we enable you to concentrate on your core competencies and strategic objectives without the distraction of technical complexities.
7. Future-Focused: Our innovative solutions are designed with the future in mind, equipping your business to navigate upcoming challenges with ease. We proactively develop strategies to ensure your organisation remains competitive and resilient in a rapidly changing environment.  

With Orixcom, you gain more than just a service provider; you acquire a dedicated partner committed to your success, working alongside you to achieve your business aspirations. 

Frequently Asked Questions (FAQs)  

Q1. What is the key difference between SD-WAN and MPLS?

A1. The main difference lies in their approach to connectivity. MPLS uses private circuits for secure communication, while SD-WAN leverages public internet and dynamic routing for flexibility, cost savings, and better cloud integration. 

Q2. Can SD-WAN fully replace MPLS for businesses? 

A2. Yes, SD-WAN can fully replace MPLS for most businesses. With features like end-to-end encryption, real-time traffic management, and secure cloud connectivity, SD-WAN provides comparable reliability while being more scalable and cost-effective.

Q3. Is MPLS more secure than SD-WAN? 

A3. While MPLS offers security through private circuits, Managed SD-WAN includes advanced security features like zero-trust access, next-generation firewalls, and cloud security integration, making it equally or more secure. 

Q4. What are the pros and cons of SD-WAN?

A4. SD-WAN offers significant advantages, including cost savings, scalability, and seamless cloud integration. It also includes advanced security features and dynamic traffic management. However, SD-WAN relies on the public internet, which might introduce latency if not managed effectively.

Q5. How does SD-WAN provide benefits over MPLS? 

A5. SD-WAN surpasses MPLS in flexibility, scalability, and cloud readiness. It offers comparable reliability at a lower cost and integrates advanced security measures, making it a future-proof solution for modern businesses.