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VXLAN — Overlay Networking

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The multi-tenant problem in data centers

Modern data centers run thousands of tenants. Each needs isolated L2 networks. VLANs support only 4094 segments — not enough. VLAN IDs must be coordinated across the entire physical network — doesn't scale.

VXLAN (Virtual Extensible LAN) solves this: encapsulate L2 frames inside UDP, supporting 16 million virtual segments (24-bit VNI). The physical network doesn't need to know about overlay VLANs.

Packets in motion — click to inspect:

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