As its name indicates, VXLAN is designed to provide the same Ethernet Layer 2 network services as VLAN does today, but with greater extensibility and flexibility. 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 coexist 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.