There is a place for IPSec VPNs. They are affordable and do the job of keeping communications secure in situations where they make sense. A good example is a network with a limited number of sites in a strict hub and spoke configuration, where all remote locations only need to communicate with a central site.
MPLS VPNs, however, make more sense in situations such as:
- Larger networks with numerous sites
- When customers need to apply QoS parameters to various applications
- If customers need a high level of performance
- Customers can't or simply don't want to deal with encryption key management
It's also possible to use a mix of both IPSec and MPLS VPNs in a hybrid configuration. Smaller sites, for example, may feed in to the MPLS VPN via IPSec connections, enabling companies to use the service that makes the most sense for each location.
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