Tunneling is a mechanism that makes transfer of payloads feasible over an incompatible delivery network. It allows the network user to gain access to denied or insecure networks. Data encryption may be employed to transport the payload, ensuring that the encapsulated user network data appears as public even though it is private and can easily pass the conflicting network.
Generic routing encapsulation (GRE) is a protocol that runs over IP and is employed when delivery and payload protocols are compatible but payload addresses are incompatible. For instance, a payload might think it is running on a datalink layer but it is actually running over a transport layer using datagram protocol over IP. GRE creates a private point-to-point connection and works by encapsulating a payload. GRE is a foundation protocol for other tunnel protocols but the GRE tunnels provide only weak authentication.
The purpose of VXLAN is to provide scalable network isolation. VXLAN is a Layer 2 overlay scheme on a Layer 3 network. It allows an overlay layer-2 network to spread across multiple underlay layer-3 network domains. Each overlay is termed a VXLAN segment. Only VMs within the same VXLAN segment can communicate.
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