VXLAN has the following benefits: • Flexible placement of multi tenant segments throughout the data center. It provides a way to extend Layer 2 segments over the underlying shared network infrastructure so that tenant workloads can be placed across physical pods in the data center. • Higher scalability to address more Layer 2 segments. VXLAN uses a 24-bit segment ID, the VXLAN network identifier (VNID). This allows a maximum of 16 million VXLAN segments to coexist in the same administrative domain. (In comparison, traditional VLANs use a 12-bit segment ID that can support a maximum of 4096 VLANs.) • Utilization of available network paths in the underlying infrastructure. VXLAN packets are transferred through the underlying network based on its Layer 3 header. It uses equal-cost multipath (ECMP) routing and link aggregation protocols to use all available paths.
