Difference Between L2VPN vs L3VPN

The differences between Layer 2 virtual private networks (VPNs) and Layer 3 Multiprotocol Label Switching (MPLS) VPNs are frequently discussed when evaluating options for securely connecting customer sites over provider networks. While Layer 2 VPN services are not yet as widely available, both VPN types utilize MPLS label switching to tunnel traffic between customer edge (CE) and provider edge (PE) devices across the service provider backbone. Key differences include Layer 3 VPNs operating at the network layer to forward IP packets based on labels, while Layer 2 VPNs forward Ethernet frames using Layer 2 addressing. Layer 3 MPLS VPNs typically scale better across large enterprise networks. However, some customers prefer Layer 2 VPNs to retain routing control within their private domain, rather than relying on the provider's routing information. Understanding the core capabilities of each VPN type allows customers to select the optimal solution for their specific requirements.

I. Introduction to Layer 2 Virtual Private Networks and Layer 3 MPLS VPNs

The differences between Layer 2 virtual private networks (VPNs) and Layer 3 Multiprotocol Label Switching (MPLS) VPNs are frequently discussed. While Layer 2 VPN services are not yet widely deployed, understanding how these two types of VPNs compare can help customers determine how they may integrate into existing private networks and provide secure connections between sites.

II. Perspectives from the Industry on Layer2 VPN vs Layer 3 VPN

At the recent MPLScon 2006 conference, businesses utilizing MPLS services analyzed Layer 2 versus Layer 3 VPN solutions. It became apparent that neither universally defeats the other. In practice, IP networks often operate over an MPLS backbone using label switching. With Layer 3 MPLS VPNs, labels determine packet forwarding rather than destination IP addresses. 

III. Packet Forwarding Differences in Layer 2 VPN and Layer 3 VPN

A key difference is that Layer 3 MPLS VPNs forward IP packets based on labels, while Layer 2 VPNs forward Ethernet frames with MAC addresses. In Layer 3 VPNs, packets contain full IP header information. In Layer 2 VPNs, frames contain Layer 2 headers but may have MPLS labels added to traverse the provider backbone between customer edge (CE) and provider edge (PE) devices.

IV. Distinctions in Network Setup for Layer 2 VPN and Layer 3 VPN

A major difference is the signaling mechanism used to establish site-to-site connectivity. Layer 3 MPLS VPNs utilize BGP routing protocol exchange between CE and PE routers to share routing information within each VPN. Layer 2 VPNs have more topology options, like point-to-point or multipoint, and standards for signaling these connections across the MPLS core.

V. Comparing Scalability and Control in Layer 2 VPN vs Layer 3 VPN

Layer 3 VPNs enable fully meshed traffic engineering not easily achieved with Layer 2 VPNs. However, some customers prefer Layer 2 VPNs to maintain control over routing within their VPN. While Layer 3 VPNs scale better for large networks, Layer 2 options like VPLS keep routing decisions within the customer domain rather than relying on the service provider.
Outsourcing routing tables is seen as a disadvantage by some corporations accustomed to private WANs like Frame Relay or ATM. Ultimately, the choice depends on customer requirements for control, scalability, and desired interaction with the MPLS provider’s routing.

VII. Conclusion

Thus, you would have gone through the various differences between the L2VPN and L3VPN. If you have more queries regarding it, or regarding any IT Certification, you could visit the SPOTO and gain the knowledge through their expert professionals.

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