Web Reference: VXLAN is an evolution of efforts to standardize on an overlay encapsulation protocol. Compared to single-tagged IEEE 802.1Q VLANs which provide a limited number of layer-2 VLANs (4094, using a 12-bit VLAN ID), VXLAN increases scalability up to about 16 million logical networks (using a 24-bit VNID) and allows for layer-2 adjacency across IP ... Virtual eXtensible Local Area Network (VXLAN) is a tunneling protocol that tunnels Ethernet (layer 2) traffic over an IP (layer 3) network. It solves limitations of traditional Ethernet networks such as the 4094 VLAN limit and redundant links that are blocked by the spanning tree protocol (STP). Why VXLAN was invented? To solve VLAN limitations in data centers and cloud, so it can provide scalability by allowing Layer2 encapsulated in UDP or so it extends VLAN. This is called MAC-in-UDP (UDP port 4789) encapsulation. In addition, it helps customer sites to configure layer2 VPN.
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