Continuing the Do Enterprises Need VRFs discussion, let’s see which enterprise networks might need MPLS.
Do you need VRFs?
Do you have many VRFs or plan to have a scalable solution?
No: VRF-Lite is probably good enough.
Using VRF-Lite in DMVPN environment might require multiple parallel DMVPN clouds.
Do you believe in SD-WAN?
Yes: You don’t need MPLS or any other technology. The black box you bought will do its proprietary magic to solve all the problems you might have (or not).
Is this a data center-only problem?
Do you plan to do layer-3 encryption (IPsec)?
No: Use MPLS. It has way lower encapsulation overhead than anything.
Yes:You would need MPLS-over-GRE-over-IPsec, in which case VXLAN-over-IPsec might be better (assuming you can get it on your WAN gear).
Do you plan to use overlay virtual networks?
Yes: implement VRFs with distributed routers in overlay virtual networks.
Do your data center switches support MPLS at reasonable cost/performance point?
No: Use VXLAN (and change gear if it doesn’t support VXLAN).
Choosing between VXLAN and MPLS on merchant silicon boxes is tricky. Support for MPLS data plane is often dismal (example: small label space), but then these same ASICs might not support routing from VXLAN tunnels either.
Do you really want to deal with complexities of MPLS and complexities of EVPN?
Yes: Use MPLS with L3VPN or EVPN control plane.
No: Use EVPN over VXLAN.