I explain the intricacies of overlay network forwarding in every overlay-network-related webinar (Cloud Computing Networking, VXLAN deep dive, Overlay Virtual Networking, VMware NSX Architecture), but never wrote a blog post about them. Let’s fix that.
First of all, remember that most mainstream overlay network implementations (Cisco Nexus 1000V, VMware vShield, Microsoft Hyper-V) don’t change the intra-hypervisor network behavior: a virtual machine network interface card (VM NIC) is still connected to a layer-2 hypervisor switch. The magic happens between the internal layer-2 switch and the physical (server) NIC.
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