Robert Sturt

By: Robert Sturt on October 10th, 2019

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How much does MPLS cost?

  • The answer is anywhere from £100 per month for MPLS into Broadband and between £300 and well over £1000 per month for UK and International Ethernet.

In this article, we discuss the current costs of MPLS for UK and Global business together with what you should consider in addition to simply requesting pricing. We have also created an IT Managers checklist of evaluation points. We offer two versions, one for UK business and the other for Global recognising the individual needs of national vs international.

One of the key areas when embarking on an MPLS procurement project is understanding budgets across UK and Global connectivity. To request pricing is often a little daunting as IT teams know, from experience, that the moment they make contact with multiple service providers, they'll be contacted by sales on a constant basis!

Learn how the Netify IT decision making portal helps UK, US & Global business conduct WAN comparison in minutes.

If your requirement is fairly simple, MPLS circuit costs for both UK and International locations isn't a massive tasks although International costs do take longer to return. However, when looking at more complex requirements, there is a need to consider cloud and security which begins to grow the project requiring serious commitment across your teams. Layer on SD WAN as a component of your hybrid architecture and evaluating the various offers on the market means you also have to wade through marketing content to understand whether software services align with your requirements.

Regardless of your needs, we hope this article is useful and for those of you considering a single backbone provider, there's an offer to leverage our BT Partnership to obtain costs. We also recognise BT isn't a fit for everyone and there's a need to evaluate provider costs. With this in mind, NU Connect will produce network reach maps and pricing across 9 major service providers

What to expect when requesting MPLS pricing?

  • In general, the associated costs and Service Level Agreements to cover latency for application performance. Including 1Gbp/s and 100Mbp/s Ethernet, EFM and Fibre Broadband.
  • Availability of MPLS Provider Edge reach - providers should be transparent with regards to the nodes that are available for your network across Global and UK
  • Estimates of the latency and jitter vs. your own applications including voice, video and (for example) Citrix
  • Which interconnects are available for private Cloud services, e.g. Microsoft Azure
  • Budgetary pricing
  • Any other associated services and costs for project management, service management, cloud and security
Learn about our SD WAN Mindmap. An at-a-glance overview of SD WAN features with a comparison of 14 major UK/Global providers & vendors.

The elements of WAN Cost-2

What are the elements which make up your MPLS cost proposal?

  • The customer edge router, the CE
  • The Ethernet tail circuit
  • The circuit type and size (Broadband, 3G, 4G, EFM, GEA, Ethernet)
  • Managed WAN services including cloud and security
  • Network monitoring, statistics and analysis
  • Adds, moves and changes
  • Contract length. 3 or 5 year terms
  • Global connectivity and reach

There is huge churn in the industry - It’s no wonder there is a high churn within the WAN services marketplace on a global basis. The majority of Enterprise IT state that their WAN connectivity is one of the most poorly serviced aspects of their IT services vs. the cost of private MPLS & VPLS attributed to the network.

In many respects, IT Managers are facing an enormous barrage of marketing from leading telco’s / carriers / resellers with data value propositions which sound too similar. The result? They are unable to differentiate. When the value is missing, and suppliers all sound the same, what is left? Price.

While Enterprise network architecture is never just about pricing, the commercials represent a significant component of the decision-making process. VPN Pricing is always a target for IT teams, we handle requests to provide IP VPN models for budget approval on a regular basis.

The WAN has more integration with a businesses competitive edge than ever before with under performing networks creating bottlenecks to new projects, customer delivery and service.

"Budget is often required before beginning a project - whether or not you put in the work before obtaining MPLS costs or after is optional but I think readers will agree, it is necessary."

Workshop your requirements vs. pricing

  • If any readers have a current network connectivity project, consider conducting a design vs pricing workshop.
  • While using an online IP VPN services calculator is great to set budgets, the overall output is rarely fit for purpose due to the multiple elements which create the overall pricing output.
  • We have witnessed some fairly large organisations buy into MPLS or VPLS private WAN solutions on a commodity basis without aligning their specific requirements with the capability of their selected service provider.
  • The risk is significant often resulting in poor application performance and downtime.

Conducting an MPLS Cost Comparison project?

  • Business strategy
  • Networking Application flow for cloud and on-site and performance
  • IP VPN Data and Networking Security
  • Cloud applications
  • Remote Users
  • Security
  • Features such as SD WAN and Hybrid

It’s no longer right to look at one particular data area of network solutions - i.e. you cannot just solve problems with a product, there is more to consider such as change and the risks involved. We hear and talk a fair amount about solution selling but the reality is that every solution has a further impact on the business - e.g. delivery or process related.

We find further problems are created outside of the solution - what first appears to be a great win impacts the business in an unforeseen way.

It is these other aspects, outside of the solution, which require focus. And to uncover these risks requires an approach which has been developed specifically for the sector you’re working within. The focus must be on your particular business.

Those companies that use IT to gain a competitive edge work, not by looking at solutions or features and benefits, they work be leveraging IT as a business advantage. Successful network services outcomes require tight alignment of supplier and business. The solution, the service, the process and the delivery must align for a fully successful outcome.

It might be easier to relate my thoughts to a scenario

Let’s consider an Enterprise IT Manager looking to move away from a current network service provider due to service related issues. We’ll call this IT Manager, Jack. Jack decides to invite several leading suppliers in to discuss their potential offerings and their MPLS costs. Jack's experience of the typical service provider sales process has not been great in the past - lots of networking features and benefits wrapped in a weak solution selling approach. The issue for Jack is to:

  • Understand exactly where the VPN related issues exist today with the WAN
  • Be clear on the business strategy to ensure service providers can meet future requirements
  • Look at other up and coming opportunities and understand whether or not they will be impacted by the WAN
  • How to communicate his business processes to the network service provider - collaboration from both sides is key
  • How to ask the right networking questions of the service providers to force transparency with their ability
  • Consider and work through process to understand how migration might take place
  • Know the service providers pricing strategy - typical contracts are 3 years, a fair amount might change within that time
  • Ultimately, quantify the business impact of this new project
  • Consider the above vs MPLS costs and other areas such as cloud computing and security
  • Ensure upper levels of management clearly understand the project risks and opportunities

As you will no doubt be aware, every WAN service provider has different aspects, strengths and weaknesses to their connectivity. A collaborative services approach is required to understand which provider has the best ability to act as an enabler to your business.

Once an understanding is gained, MPLS costs are discussed and a deal is struck. This applies to all providers you might be considering. We appreciate that a budget is often required before beginning a project - whether or not you put in the work before obtaining MPLS costs or after is optional but I think readers will agree, it is necessary.

Tiered service - reducing MPLS cost per Mbps

  • With Ethernet bandwidth available as standard up to 1Gbps data speeds, overall pricing is reduced by tiering the cost per Mbps down vs the port size.
  • As an example, clients can select 100Mbps circuits with 10Mbps tier. The increments for 1Gbps services are set at 100Mbps tiers.
  • Also, selected networks offer a usage-based policy, you are only charged for the data used.

The cost of MPLS bandwidth

The MPLS bandwidth cost for private VPN has been dramatically reduced over time, with this said, careful consideration into the quality of your service should be considered.

With the average SLA offering 5 9's up time, it is becoming increasingly difficult to differentiate between providers. The PE - Provider Edge - device represents the entry point into the providers network and, therefore, provides information on the true MPLS scale and coverage of any prospective supplier.

The majority of marketing content will profess to offer extensive network coverage but the reality is that the connectivity will be based on wholesale tail circuits rather than actual PE coverage.

Lower pricing is achieved if the coverage of PE devices is higher since the tail circuit distance will be lower. Additional bandwidth charges will be made for QoS - Quality of Service - on a per Kbps and Mbps basis.

  • Expedited Forwarding - reserved for delay-sensitive voice traffic
  • Assured Forwarding - used for mission critical data applications such as Citrix traffic (for example)
  • Best Effort - where all other non-business impacting application traffic is sent such as Email

What are the current types of connectivity into MPLS?

  • Often, MPLS networks are complemented by hybrid connectivity including layer 2 VPLS, Short Haul Data services, Internet VPN and SD-WAN.
  • There is huge buzz around SD-WAN services right now due to cost savings of Internet connectivity.
  • MPLS remains the ONLY WAN capability offering end to end privacy and Quality of Service.

Connectivity types - 3G, 4G | Broadband ADSL | Ethernet Leased Line

3G and 4G services have matured to offer a data capability for small office sites and remote users. The reasons are clear - bandwidth is available for a relatively low budget. However, IPSec is required to secure public Internet connectivity and readers should note that the packet latency is often high with 3G and 4G technology even if bandwidth appears to be sufficient. High traffic latency with poor jitter will render a voice application unusable. With this said, this type of wireless connectivity technology is available over short contract terms at a low cost.

Broadband / ADSL services offer some good technology performance vs price, especially when connected to fibre to the cabinet based exchanges. We largely recommend broadband services for smaller offices due to the unpredictable bandwidth together with reliability vs leased line equivalents.

We mentioned 100Mbps and 1Gbps Ethernet earlier within the article. Ethernet leased line service offer excellent uptime, predictable levels of performance and aggressive SLAs (Service Level Agreements).

Ethernet Resiliency and high availability MPLS Line Cost

Ordering a second high availability circuit creates a higher cost for the failover line due the work required to avoid any single point of failure.

No single point of failure?

MPLS Pricing and Failover-1

A second wholesale carrier local loop tail circuit will, where possible, route via dual building entry points, dual local tail circuits through to dual provider edge nodes.

Whether or not resiliency is possible is largely dependent on your locality since second fibre routes will either need to be created (costly) or may exist such as the majority of metro locations.

Excess construction costs are not commonly known about before site survey. Customers place an order for an MPLS or VPLS line, the workflow results in an engineer visiting your office to survey the site to (or “intending to”) establish whether work is required to connect your sites line to the providers network.

About Robert Sturt

Managing Director of an authorised BT Business Partnership with a focus on assisting Global and UK Enterprise and Medium organisations with BT WAN procurement. Responsible for creating workflows which align the specifics of an organisations business strategy and technical requirements to the BT portfolio of connectivity.