What Does Pseudowire (PW) Mean?
Pseudowire (PW) is an emulation of a wired connection. It is the emulation of various telecommunication or networking services such as edge-to-edge connection over packet-switching networks (PSN).
It emulates the essential attributes of a packet-switching network such as ATM, Ethernet or Frame Relay. It allows the transport of these legacy services over new systems such as Multiprotocol Label Switching (MPLS) cores.
Techopedia Explains Pseudowire (PW)
PW is meant to be run with Layer Two Tunneling Protocol (L2TP) networks, IP networks and more commonly on MPLS networks.
These networks serve as the "packet cloud" where connection-oriented tunnels are created in order to support the PW. In the case of MPLS networks, two inner-tunnel unidirectional label-switched paths (LSP) are contained inside a single unidirectional outer-tunnel LSP which act as a traffic engineering tunnel. This creates a bidirectional connection between two provider edge (PE) routers.
PW are considered as powerful tools for convergence especially with telecom operators building large-scale IP-based networks and extended MPLS at the edge of those networks.
It means that legacy services that are already generating revenue and are still in wide use can take advantage of the high speed and wider connectivity of the new networks which lowers the cost of bringing these legacy services to the customers.