In nowadays shifting economy, service providers' revenue and profitability hinge on delivering managed network services in addition to connectivity services. The global market for managed VPN services, for example, is expected to top US$21 billion by 2007, according to Ovum, a market research and consulting firm. Managed VPN services provide the foundation for additional value-added services such as managed IP telephony, managed security, hosted applications, e-commerce, content delivery, disaster recovery, integrated access, and multimedia applications. This paper compares MPLS- and IPSec-based L3VPN architectures. It explores the L3VPN mechanisms developed by the IETF and summarizing the general objectives of VPNs. Next it presents the relative strengths of MPLS- and IPSec-based VPNs and explains how service providers can use both architectures for optimum advantage.
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