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They began as totally separate and distinct technologies: Ethernet as the standard in the LAN, and MPLS VPNs as an attractive alternative to frame relay and ATM services in the WAN.

But now they are starting to collide. Service providers are turning up Layer 2 Ethernet VPNs based on an MPLS derivative called Virtual Private LAN Services (VPLS) on a regional, national and eventually, global basis. And while some carriers say VPLS Ethernet is a complementary access or metro technology to MPLS national and global services, some acknowledge that users are reconsidering their Layer 3 VPN decisions.

VPLS is intended for businesses that prefer to maintain control of their routing, for security and staffing purposes, rather than share it with their service provider. Layer 3 MPLS VPN users choose to let the service provider manage the routing domain.

This will usually be the chief determinant of whether an enterprise selects a Layer 2 or Layer 3 VPN service, carriers say. But some users have also cited the ability to scale multicasts as a benefit of Layer 3 MPLS VPNs, especially as they migrate to service-oriented architectures.

MPLS VPNs have been around a few years longer than VPLS. But as VPLS continues to mature and become more functionally complete, the decision to pick one over the other will become harder – and the ability of carriers to keep one from cannibalizing the other will be tougher as well.

"I don't think it's a zero-sum game," said Josh Holbrook of the Yankee Group. "I don't think one of those services will prevail over the other.”

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