Overlay networking

This is the most important part of the cloud ecosystem. These are secondary networks that run over the underlay network in a transparent manner. 

The overlay network is implemented by using two major technologies: 

• GRE - Generic Routing Encapsulation 
• VLAN and VxLAN- Virtual LAN and Virtual Extensible LAN 

While GREs have been implemented for a long time on physical routers and switches on the WAN side of the overlay to create the required logical topology on the physical links, on the LAN/data center side of the network, these networks are mainly implemented using virtual network devices - such as virtual switches in the hypervisor. 

Let's take a look at the technologies before we discuss their usage in a hybrid cloud scenario.