VxLAN networking technology

With Windows Server 2012, Microsoft introduced Software-defined Networking (SDN) and the NVGRE technology. Hyper-V Network Virtualization supports Network Virtualization using Generic Routing Encapsulation (NVGRE) as the mechanism to virtualize IP addresses. In NVGRE, the virtual machine's packet is encapsulated inside another packet:

VxLAN comes as the new SDNv2 protocol; it is RFC compliant and is supported by most network hardware vendors by default. The Virtual eXtensible Local Area Network (VxLAN) RFC 7348 protocol has been widely adopted in the marketplace, with support from vendors such as Cisco, Brocade, Arista, Dell, and HP. The VxLAN protocol uses UDP as the transport: