Protocol overheads I would say.
Each tunnelling protocol has a number of bytes of overheads for each packet that gets carried. This increases the utilisation of your links, and also reduces the effective MTU available to your payload.
Link utilisation might be the least of your worries, but a reduction in MTU can have bigger consequences, like reduced performance due to the need to send a higher number of smaller packets, and perhaps connectivity issues if end hosts dont correctly account for the lower MTU and try to blast 1500 byte packets through.
|reply to Bigpaddy_Irl |
VLAN will also be less CPU overhead than almost any other option. MPLS is damn fast, but it's not trivial to setup. VLAN is pretty easy, doesn't frag, and will also give you visibility into the traffic if needed.