IP VPN and Ethernet Wide Area Networks Enhanced by SD-WAN and Virtualized Network Solutions


Today's enterprise information and communication technology (ICT) requires flexible, diverse, and reliable bandwidth options. Bandwidth demand is increasing exponentially, and networking methods are diverse, ranging from private multiprotocol label switching (MPLS) networks to public IP over secure wired and wireless broadband. This new hybrid IT scenario requires a new technology architecture that can provide agile and guaranteed performance depending on the specific applications in use. The foundation for secure, reliable hybrid IT networking is a communication service provider (CSP)-managed virtual private network (VPN) service capable of delivering a rich suite of voice, video, and business-critical data applications to the entire range of enterprise locations including headquarters (HQ), datacenter, and remote offices. This can be implemented via an access-agnostic wide area network (WAN), with rapid provisioning, flexibility, and transparency leveraging a seamless software-defined network (SDN)-based managed virtualized service incorporating MPLS and softwaredefined solutions.

This IDC white paper analyzes the trends and business drivers that are propelling enterprises toward the implementation of hybrid ICT services that can leverage the security and reliability of IP VPN, ondemand Ethernet, and software-defined networking services, including SD-WAN. CSPs are enhancing hybrid ICT with diverse access and virtualized network solutions that are tailored to provide the optimal performance of applications and vertical use cases.


WAN connectivity options for enterprises have evolved from traditional SONET-based private line, frame relay (FR), and ATM-based WAN connectivity to newer services such as network-based IP VPN services, Ethernet, and software-defined services including SD-WAN. IP-based WANs are widely available and ubiquitous and offer quality of service (QoS) that is the foundation of network-based IP VPNs. The availability of fiber-based broadband service as well as mobile broadband access provides another cost-effective option for enterprises seeking to rationalize networking costs. While many enterprises are opting for network-based IP VPNs and Ethernet WANs as their WAN service of choice, software-defined access that leverages broadband and LTE circuits has emerged as a viable option.

Today's IP VPNs are based on MPLS technology. MPLS is an IETF standard that defines a packet label-based switching technique, which was originally devised to perform fast switching in the core of IP networks, helping carriers and large enterprises scale their networks as increasingly large routing tables become more complex to manage.

Today, MPLS is widely used by service providers to connect organizations' data networks with multiple, dispersed locations. By encapsulating these varying protocols in "labels," an MPLS network can make packet-forwarding decisions without understanding the contents of the packet. Enterprises can eliminate multiple complex overlay networks and transport many new and existing voice, video, and data applications over a single MPLS network.

IP VPN Services

An IP VPN service is a site-to-site connection with the service provider managing the end-to-end network and can be deployed in one of two methods:

  • A network-based IP VPN is also sometimes referred to as a private IP VPN when it uses the secure infrastructure of a single network provider.
  • A public IP VPN (or internet VPN) carries "best effort" data across multiple and nonspecified IP backbone infrastructures, often using customer-owned or customer-managed premises equipment (CPE) and IP Security (IPSec) tunneling, which is an end-to-end security scheme that encrypts every IP packet.


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