What Is VXLAN? Simple Explanation and How It Powers Large Virtual Networks

Have you considered how large data centers can manage to keep all their servers and virtual machines (VMs) working together without paralyzing the whole data center? The answer is something called VXLAN, or Virtual Extensible LAN. It is a clever way to keep a large network working properly, even when the server or virtual machines are located far from one another. Here is the explanation:

What is VXLAN?​

Think of your network as a neighborhood where all your computers (or VMs) live. In order for them to talk to each other directly, they must be on the same local network (LAN). But what happens when your computers are in different buildings or in different cities?

This is when the VXLAN shows up! VXLAN gives you a bridge to your distant network, and makes all your VMs talk like they are in the same room together!

VXLAN accomplishes this by creating a sealed data packet, wrapped in another packet (this is called tunneling). To help visualize it, it is like putting a letter inside an envelope and using that address to get to its faraway home. VXLAN uses the internet as the carrier for your local network traffic, sent over long distances.

Why Is VXLAN Important?​

Older networks are dependent on the VLAN standard for traffic management. Unfortunately, that standard allows only about 4,000 connections. That's useful for a small network, but it is not anywhere near sufficient for large cloud providers or data centers with thousands of users.

VXLAN provides a solution to increase capacity to a theoretical maximum of up to 16 million connections!

With VXLAN:

• You can easily segment traffic between different users or applications.
• A cloud vendor can create a dedicated private network for each customer.
• An IT organization can easily scale its network without having to build out an entirely new network infrastructure.

The first time I deployed VXLAN in the lab, I was pleasantly surprised. Connecting virtual machines across a couple of servers as quick and painless, with no hardware and no heavy configuration.

VXLAN Usage in Cloud and Virtual Networking​

When it comes to cloud, scaling and flexibility are where it’s at — and VXLAN can do both:

• Works with SDN frameworks like VMware NSX or OpenStack.
• Isolates and secures network traffic for different clients.
• Allows virtual machine mobility between data center environments while preserving connectivity.

The industry's giants — AWS and Azure — are using similar tech to smoothly connect millions of servers — and VXLAN is a piece of the magic at work.

Closing Thoughts​

In short, VXLAN helps large virtual networks operate and scale seamlessly. VXLAN transcends the legacy network limitations and makes cloud environments flexible, secure, and connected.

If you ever hit some limits with your network or moving workloads, VXLAN feels like the perfect answer. It’s the unsung hero behind the scenes continuing to keep modern data centers running smoothly.