It’s in the provider’s best interest to have as many customers as possible, and a large provider may have thousands. Each customer has a Virtual Private Network (VPN), which means that the provider’s network acts as if there is a private WAN for each customer. Since we’re using VPNs (which act as logically separate networks), there are no address collisions, despite the overlapping address spaces.

Because the provider doesn’t know what routed protocols the customers are using, the provider has nothing to do with the customer routing protocols, either. The system we’re using is commonly referred to as an overlay VPN, because we have “overlaid” (superimposed) a VPN for each customer onto the provider’s Layer-2 network.

The advantages of overlay VPNs are:

• A common physical infrastructure is shared between customers
• Customers can independently choose any logical topology they want
• Customers can use any combination of Layer-3 protocols they desire
• There are no address collisions between customers
• The provider does not participate in customer routing

Continue reading to get more information on MPLS VPNs.