At the moment, the debate between Layer 2 VPN services based on MPLS and Layer 3 MPLS VPNs is largely theoretical; Layer 2 VPN service are not widely available yet.
But the two are different enough for potential customers of one or both of the services to consider now how they might fit into current networks.
At the recent MPLScon 2006 conference, businesses that use MPLS services talked about Layer 2 vs. Layer 3 services in some detail, and it is apparent that neither is going to defeat the other.
Layer 3 MPLS VPNs are characterized by fully meshed architectures that enable, for instance, multicast conferencing in support of projects involving a dispersed work group. Layer 2 MPLS technology is limited in this area because it does not scale as well as Layer 3.
Some businesses like the Layer 3 options that are available now because the service provider takes over all the WAN routing, whereas with a Layer 2 WAN, such as MPLS-based virtual private LAN services (VPLS), businesses would have to handle the routing themselves, customers noted.
Outsourcing of routing tables is also seen as a weakness of Layer 3 VPN services because many corporations don't want to relinquish control or even share their routing schemes with anyone, not even their service provider. They prefer Layer 2 network services, such as frame relay or ATM, that are simpler in architecture and that allow customers to retain control of their own routing tables.
Businesses considering MPLS VPN services should factor these differences and opt for the one that best fits their own needs, and remember that once they are tied into the network, they will have the option for either.