VXLAN is a network virtualization technology that leverages existing Layer 3 infrastructures to create tenant overlay networks. VXLAN addresses the requirements of a multi-tenant data center network infrastructure by:
  • Increasing virtual network scalability to 16 million instances. This allows for tenant VLAN isolation whereby multiple tenants can manage their own VLAN/VMAN and MAC address spaces.
  • Adding an encapsulation that effectively hides VM MAC addresses from the physical network that results in physical networking devices to have smaller MAC and IP table sizes.
  • Allowing for Layer 2 adjacency across IP networks by which DC network operators protect their investment in their current infranstructure. Additionally operators can distribute traffic loads across links efficiently using Layer 3 ECMP.