An Overview of MPLS VPNs: Overlay, Layer 3, and PseudoWire

From the provider perspective, MPLS (Multiprotocol Label Switching), is attractive because all of these services (Layer-1, Layer-2, and Layer-3 VPNs) can all be carried simultaneously over the same infrastructure, with only the PE routers requiring configuration on a per-customer basis. This white paper, which assumes you understand the big picture when it comes to MPLS, focuses on what happens when a data packet traverses an MPLS cloud.