ATLANTA -- Supercomm -- Masergy Communications Inc. a global service provider focused on IP data services, announced yesterday that it has launched the first commercially available Virtual Private LAN Service (VPLS), based on standards work in the Internet Engineering Task Force (IETF) (see Masergy Launches VPLS).

Plenty of other carriers already offer transparent LAN interconnect services, but VPLS is different because it's multipoint and because the LANs can be a limitless distance apart. Existing LAN interconnect services typically work only within a metro area network.

Currently, VPLS standards are still in development, but Masergy is using gear from TiMetra Networks, a startup -- currently in the process of being acquired by Alcatel SA (NYSE: ALA; Paris: CGEP:PA) -- which has based its technology on a widely adopted pre-standard implementation of VPLS (see TiMetra Shoots for Service Edge). TiMetra, and several other vendors, together with Masergy, are participating in a VPLS interoperability demonstration at the Supercomm 2003 tradeshow in Atlanta this week (see Supercomm Demo Mania).

Even though the standard hasn't been finalized, customers are already demanding the VPLS service, says Kenneth Frank, senior vice president of engineering and systems for Masergy.

“We were hesitant to start offering it so soon,” he says. “But a customer came to us and really wanted it.”

Masergy had already been offering two MPLS-based VPN services prior to launching the VPLS service. It offers a Layer 2 service based on Draft Martini that connects sites together in a point-to-point configuration. It also offers a Layer 3 MPLS VPN service based on the IETF standard, RFC 2547. This service is used to provide meshed connectivity between sites for IP traffic.

Frank says many customers are moving away from Layer 2 point-to-point VPN services and are instead asking for Layer 3 IP VPNs. But he says some customers, like the financial institution that requested VPLS, don’t want to give up control of their routed infrastructure. Because VPLS is a Layer 2 service, corporate customers can retain control of their routing but also benefit from the efficiencies of a multipoint architecture.

Despite the benefits of VPLS, there are plenty of experts who deprecate it. Luca Martini, senior architect with Level 3 Communications Inc. (Nasdaq: LVLT) and author of Draft Martini has criticized the technology for not scaling well. Bruce Davie, a Cisco Fellow and author of several early MPLS IETF drafts, says he too has reservations about the scaleability of the technology.

“Clearly, service providers are interested in VPLS,” Martini said during an interview with Light Reading last month. “It offers more value to them than a simple point-to-point service. But my concern with VPLS is that all those MAC addresses must be held somewhere, and that can be difficult to scale.”

The problem with VPLS is that it switches traffic based on MAC address, which means that information must be maintained in certain switches. If the service is configured using an Ethernet switch to connect the LAN to the service provider's network, all of the MAC addresses within that corporate LAN must be maintained by the service provider edge switches. Keeping track of all these address can turn into an administrative nightmare, says Davie.

"At the end of the day, everybody knows that routed networks scale better than bridged ones,” he says.

But Frank says Masergy has dealt with these scaling issues. For one, he says that Masergy’s service does not map customer LANs directly into a VPLS service. A router is used at the customer site, so that only one MAC address per LAN is used.

Secondly, the VPLS domains offered today are relatively small. Frank says that most customers are only connecting seven or eight sites. He estimates that a single VPLS service could include between 30 and 50 sites without any scaleability issues.

If a customer exceeds this limit, he says, Layer 3 VPNs using RFC 2547 can be used to route between VPLS domains.

“There’s nothing that stops us from using a hybrid approach,” he says. “We can break up the WAN into smaller domains and route between them.”

— Marguerite Reardon, Senior Editor, Light Reading