Overlay and Peer-Peer VPNs

Overlay VPN – Old method;


  • Easy to implement and well-known.
  • Service provide just provides the L1/L2 connectivty between customer sites.
  • Service provider will not participate in customer routing and hence customer need not to relay on SP.


  • Optimal routing requires full mesh connectivity between customer sites. Need n(n-1)/2 virtual circuits for full mesh connection of “n” sites.
  • Virtual-circuit has to be laid manually
  • Encapsulation (GRE/IPsec) needs to be implemented in SP network. Ovehead.

Peer-Peer VPNs; – Currently deployed and efficient way with MPLS


  • Optimal routing between customer sites is guaranteed.
  • Routing information is exchanged between CE and PE routers.
  • Configuration part is easier than in overlay model.


  • PE router has to carry many customers’ routes. Bit overload on PE routers. (Not a big deal with current router design)
  • SP network become responsible for customer network convergence. Any n/w breakage in SP might affect customer routing. Customer has to relay on Service Provider (SP). (Not  an issue, with MPLS FRR)
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