Overlay Virtualization

What Does Overlay Virtualization Mean?

Overlay virtualization is a method for creating traffic
isolation within a multitenancy infrastructure. Using a form of tunneling
between isolated network segments, it allows for scalability and ease of use
while providing for separation between the virtual network and the underlying
physical environment.


Overlay virtualization is also known as an overlay network.

Techopedia Explains Overlay Virtualization

Network overlays are nothing new. Virtual networks created by links such as virtual circuits (VCs), virtual LANs (VLANs), and virtual private networks (VPNs) have been around for some time. Protocols such as multi-protocol label switching (MPLS) and virtual private LAN service (VPLS) were created to join isolated networks across the wide area network.

With the migration to fully virtualized environments, virtual networks also became isolated. Overlay virtualization offers the solution for uniting these network segments.

Overlay virtualization can take many forms. Virtual network abstractions can be constructed using virtual network components, such as switches or routers, but connections to physical devices require some sort of overlay gateway function.


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Margaret Rouse

Margaret Rouse is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical, business audience. Over the past twenty years her explanations have appeared on TechTarget websites and she's been cited as an authority in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine and Discovery Magazine.Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages. If you have a suggestion for a new definition or how to improve a technical explanation, please email Margaret or contact her…