Multi protocol labeled switching (MPLS) is the mechanism used in high performance telecommunication networks and is considered to be highly scalable data transferring method from one network node to the other. It belongs to the packet switched networks family where the data is in the form of packets that are to be transferred. Each data packet is assigned with a particular label which alone influences the packet routing or forwarding decisions without any detailed examination of the packets. The MPLS service provider network uses high capacity routers along with the MPLS edge routers that send as well as receive data from the routers placed at individual locations. The virtual private network (VPN) is a secured network that connects remote users or sites with business’s private network through virtual connections routed through internet. It is designed to provide a secured, encrypted path through which data is transmitted between the remote user and the company network. The MPLS VPN service are set of methods that deliver an efficient, scalable and reliable method of connecting sites together in multiple locations and countries to provide fully managed WAN capability. It is a common platform where a large number of services such as enterprise resource planning (ERP), multimedia, videoconferencing, voice over IP (VoIP), etc, are provided. The MPLS technology significantly reduces the need of data link layer technology such as frame relay, asynchronous transfer mode (ATM) and Ethernet. The data link layer technology is significantly complex and expensive in nature as compared to MPLS VPN technology which enables companies to have a direct connection with the geographical sites without purchasing any physical circuits for it.

The MPLS IP VPN services are provided in two ways which are Layer 3 MPLS VPN and Layer 2 MPLS VPN. IT departments in major institutions including government offices and banks need to control the networking as well as routing decisions in order to manage the security issues, use Layer 2 VPN services. IT departments of organizations which outsource their routing and networking decisions usually choose Layer 3 VPN services. One of the major factors driving the growth of MPLS IP VPN services market is the incorporation of these networks by several enterprises in order to benefit themselves by high performance and cost minimization.

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The maturity of the VPN market in recent years has also significantly led the enterprises to adopt the MPLS IP VPN services, further driving the growth of this market. Another important driving factor is the decline of the ATM/relay market due to its complexity and expensive nature which buoyed the growth of MPLS IP VPN market. MPLS IP VPN services have the capability of providing scalable bandwidth and can combine the voice, data and video from multiple platforms to a single platform encouraging adoption of MPLS IP VPN services, hence, leading to potential market growth. The technology considerably meets the increasing traffic requirements where extra capacity is required. As MPLS provides quality of service (QoS), a major requirement for video conferencing, VoIP, etc, it is further considered a good opportunity for market growth in the coming years.

Some of the key players of the MPLS IP VPN services market are AT&T Inc, Verizon Communication, Inc., BT Global Services, Orange Business Services, Sprint Corporation, CenturyLink, Inc. and Cisco Systems, Inc.