Network Virtualization Protocols
Network virtualization technologies logically divide networks to enhance security, performance, and administrative control across enterprise and cloud infrastructures.
Technology |
Description |
Use Case |
|---|---|---|
VPC (Virtual Private Cloud) |
Virtual network in cloud environments that mimics traditional networking. Supports routing, security groups, subnets, and gateways. |
Deploying secure cloud applications with private subnets. |
VXLAN (Virtual Extensible LAN) |
Encapsulates Layer 2 frames within UDP over IP to create overlay networks. Enables scalable multi-tenant segmentation across IP networks. |
Large-scale data center overlay networks and tenant segmentation. |
NVGRE (Network Virtualization using Generic Routing Encapsulation) |
Uses GRE to encapsulate tenant network traffic over IP. Provides overlay virtualization with simpler header overhead than VXLAN. |
Tenant isolation and segmentation in private cloud environments. |
Geneve (Generic Network Virtualization Encapsulation) |
A flexible encapsulation protocol designed to unify VXLAN, NVGRE, and others. Provides customizable header fields and rich metadata. |
Modern overlay networks in software-defined data centers and cloud-native environments. |
Used By: AWS, GCP, Azure, Oracle Cloud
Main Features:
Virtualized network within cloud provider infrastructure
Includes subnets, route tables, firewalls, and NAT gateways
Supports public and private IP address ranges
Fine-grained control over routing and connectivity
Enables secure and isolated cloud workloads
Use Cases:
Hosting cloud-native or hybrid applications securely
Isolating environments (e.g., dev, test, prod)
VPN and Direct Connect for hybrid cloud access
Applying firewall and security group policies per subnet
Alternative Technologies:
On-premises VLANs and VRFs
SDN – Software-defined overlay networks
NSX, Azure Virtual Network, GCP VPC Peering
Let us learn more about VPCs:
RFC / Specification: IETF RFC 7348
Main Features:
Encapsulates Ethernet frames in UDP/IP (UDP port 4789)
Supports up to 16 million VXLAN Network Identifiers (VNIDs)
Enables multi-tenant overlays across layer-3 infrastructure
Integrates with multicast or unicast (EVPN) for flood-and-learn operations
Operates as an overlay to isolate tenant traffic in data centers
Use Cases:
Scalable tenant segmentation in large-scale cloud data centers
Overlay network virtualization in EVPN deployments
Extending VLANs across geographically distributed sites
Alternative Technologies:
NVGRE – GRE-based encapsulation for overlays
Geneve – Extensible, metadata-rich overlay design
VPC – Broad, cloud-provider specific network virtualization
Spec: Microsoft VGRE and NVGRE design proposals (industry de-facto; not formal RFC)
Main Features:
Uses GRE (IP protocol 47) to encapsulate Layer‑2 frames over IP
Simpler header compared to VXLAN; includes tenant ID in GRE key
Supports tenant segmentation and scalable overlays
Integrates well in environments with GRE-aware devices
Use Cases:
Building network virtualization overlays in private clouds
Tenant-isolated network virtualization using GRE encapsulation
Alternative Technologies:
VXLAN – UDP-based overlay with EVPN support
Geneve – Extensible, open metadata encapsulation format
Spec: IETF draft/perhaps RFC-in-progress; designed by the Cloud Native Computing Foundation (CNCF)
Main Features:
Flexible, extensible header with metadata options
Encapsulates Layer‑2 or Layer‑3 payloads over UDP/IP
Designed to unify features of VXLAN, NVGRE, and others
Supports variable-length optional metadata for advanced use cases (e.g., NSH, flow affinity)
Use Cases:
Overlay networking in cloud-native environments and SDN fabrics
Multi-tenant segmentation with rich, programmable context data
Alternative Technologies:
VXLAN – mature, widely supported overlay protocol
NVGRE – simpler GRE-based overlay
VPC – cloud-provider-specific network virtualization