VXLAN provides the same Ethernet Layer 2 network services as VLAN does today, but with greater extensibility and flexibility. It is a Layer 2 overlay scheme over a Layer 3 network. It uses MAC Address-in-User Datagram Protocol (MAC-in-UDP) encapsulation to provide a means to extend Layer 2 segments across the core network. VXLAN is a solution to support a flexible, large-scale multitenant environment over a shared common physical infrastructure. The transport protocol over the core network is IP plus UDP. Compared to VLAN, VXLAN offers the following benefits:

• Flexible placement of multitenant segments throughout the data center: It provides a solution to extend Layer 2 segments over the underlying shared network infrastructure so that tenant workload can be placed across physical pods in the data center.

• Higher scalability to address more Layer 2 segments: VLANs use a 12-bit VLAN ID to address Layer 2 segments, which results in limiting scalability of only 4094 VLANs. VXLAN uses a 24-bit segment ID known as the VXLAN network identifier (VNID), which enables up to 16 million VXLAN segments to co-exist in the same administrative domain.

• Better utilization of available network paths in the underlying infrastructure: VLAN uses the Spanning Tree Protocol for loop prevention, which ends up not using half of the network links in a network by blocking redundant paths. In contrast, VXLAN packets are transferred through the underlying network based on its Layer 3 header and can take complete advantage of Layer 3 routing, equal-cost multipath (ECMP) routing, and link aggregation protocols to use all available paths.

The VXLAN anycast gateway feature extends anycast functionality to VXLAN. It enables the use of anycast routing on a network for underlay multicast load-balancing and redundancy.

The VXLAN anycast solution:

• Allows true active-active first hop gateways (active-active on a per flow basis).

• Does not involve any new control or management plane protocols or any form of external SDN controllers or NMS to co-ordinate and synchronize gateways.

The anycast gateway feature follows these basic concepts:

• Creating a virtual Layer 3 gateway and a virtual VTEP across multiple VXLAN gateways. These gateways use an identical configuration of an overlay IP address, overlay MAC address, and underlay VTEP IP address.

• Creating a private multicast group between the gateways to use as a data plane mirror for certain types of overlay control packets.

Note	The VXLAN anycast gateway feature is supported on only Cisco ASR 9000 High Density 100GE Ethernet line cards.

VXLAN defines a MAC-in-UDP encapsulation scheme where the original Layer 2 frame has a VXLAN header added and is then placed in a UDP-IP packet. With this MAC-in-UDP encapsulation, VXLAN tunnels Layer 2 network over Layer 3 network. The VXLAN packet format is shown in the following figure.

As shown in the above figure, VXLAN introduces an 8-byte VXLAN header that consists of a 24-bit VNID and a few reserved bits. The VXLAN header together with the original Ethernet frame goes in the UDP payload. The 24-bit VNID is used to identify Layer 2 segments and to maintain Layer 2 isolation between the segments. With all 24 bits in VNID, VXLAN can support approx 16 million LAN segments.

VXLAN uses VXLAN tunnel endpoint (VTEP) devices to map tenants' end devices to VXLAN segments and to perform VXLAN encapsulation and de-encapsulation. Each VTEP function has two interfaces: One is a switch interface on the local LAN segment to support local endpoint communication through bridging, and the other is an IP interface to the transport IP network.

The IP interface has a unique IP address that identifies the VTEP device on the transport IP network known as the infrastructure VLAN. The VTEP device uses this IP address to encapsulate Ethernet frames and transmits the encapsulated packets to the transport network through the IP interface. A VTEP device also discovers the remote VTEPs for its VXLAN segments and learns remote MAC Address-to-VTEP mappings through its IP interface. The functional components of VTEPs and the logical topology that is created for Layer 2 connectivity across the transport IP network is shown in the following figure.

The VXLAN segments are independent of the underlying network topology; conversely, the underlying IP network between VTEPs is independent of the VXLAN overlay. It routes the encapsulated packets based on the outer IP address header, which has the initiating VTEP as the source IP address and the terminating VTEP as the destination IP address.

The following are the prerequisites to configuring a Cisco ASR 9000 series router as a VXLAN Layer 2 gateway:

• Configure a loopback interface. It serves as a source interface for the local VTEP.

• Configure unicast reachability to remote VTEPs.

• Configure Bidirectional Protocol Independent Multicast (Bidir PIM) or PIM Sparse Mode. For more information, see the Multicast Configuration Guide for Cisco ASR 9000 Series Routers.