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[Tweet](https://twitter.com/share) ![Network engineers working in a server room - TeleDynamics blog](https://info.teledynamics.com/hs-fs/hubfs/blog-images/VXLAN_2.jpg?width=1200&height=627&name=VXLAN_2.jpg) Modern enterprise networks are becoming increasingly complex, posing significant challenges in terms of scalability and segmentation. This is seen especially within traditional layer 2 architectures. To address these limitations, technologies like Virtual eXtensible LAN (VXLAN) have emerged, offering a scalable and flexible solution to extend layer 2 networks over layer 3 infrastructure. As VoIP and UC technologies continue to leverage virtualized and cloud infrastructures, understanding technologies like VXLAN becomes essential for those deploying such applications. In this article, we examine what VXLAN is and how it can help enable modern VoIP and UC deployments. ### **Understanding OSI layers** ![The 7 layers of the OSI model - TeleDynamics blog](https://info.teledynamics.com/hs-fs/hubfs/blog-images/osi-model.gif?width=249&height=328&name=osi-model.gif)When designing networks, the Open Systems Interconnection (OSI) model is used to help conceptualize how data moves through a network. It aids in understanding network communication from physical transmissions, all the way up to application-level processing. Each layer is responsible for various network mechanisms that allow communication to take place. Layers 2 and 3 are responsible for physical and logical addressing, respectively, and are known as the data link layer and the network layer. Ethernet and MAC addresses live in the data link layer, while IPv4 and IPv6 addresses and routing take place at the network layer. This distinction of layers aids in the design and operation of networks. As networks scale, this becomes all the more important. For example, the following diagram shows an extensive enterprise network consisting of several network segments, depicted with yellow circles and ellipses. Communication between hosts within these network segments uses layer 2 mechanisms such as Ethernet and MAC addressing. This is displayed using green communications arrows. Layer 3 mechanisms, such as IP routing, must take place for end-to-end communication between hosts in different network segments, as shown with the red arrows. Notice, however, that layer 3 communication, which takes place from end device to end device, also requires the underlying layer 2 communication to take place from hop to hop. ![Diagram depicting an enterprise network consisting of several network segments - TeleDynamics blog](https://info.teledynamics.com/hs-fs/hubfs/blog-images/2025-05-31%20-%20Understanding%20VXLAN%202.png?width=986&height=649&name=2025-05-31%20-%20Understanding%20VXLAN%202.png) Other than the physical segmentation in the network above, additional logical segmentation can take place by using virtual LANs (VLANs). These are configured within switches to further subdivide a network into segments. ### **Network segmentation limitations** Traditional network segmentation and VLAN implementations are fine for an enterprise network such as this one. However, this type of arrangement has certain limitations for networks designed for use in data centers, cloud computing infrastructure, and virtualized environments, including the following: - **Scalability:** Traditional VLANs are limited to 4,096 virtual network segments because the VLAN field defined by the IEEE 802.1Q standard is 12 bits in length. This is insufficient for public clouds or modern data centers. - **Layer 2 stretching:** Modern applications often require a layer 2 segment to be extended across geographically dispersed data centers. Although traditional network segmentation using VLANs has some flexibility, it is still quite limited in this regard. - **Enabling VM (virtual machine) mobility:** As workloads become virtualized, they can dynamically migrate between the physical hosts on which they are running. However, traditional VLANs cannot maintain consistent network policies in such a dynamic environment. These limitations are among the most significant when building modern network infrastructures that can support the dynamic nature of cutting-edge applications, multi-tenant architectures, and hybrid cloud deployments. This is where VXLAN comes in. ### **How VXLAN delivers flexibility and scalability** Virtual eXtensible LAN, or VXLAN, is an overlay network protocol designed to address the limitations of conventional VLAN-based segmentation by enabling the creation of virtual layer 2 networks over a layer 3 infrastructure. ![VXLAN virtual layer on top of a layer 3 network infrastructure - TeleDynamics blog](https://info.teledynamics.com/hs-fs/hubfs/blog-images/2025-05-31%20-%20Understanding%20VXLAN%201.png?width=1001&height=552&name=2025-05-31%20-%20Understanding%20VXLAN%201.png) As shown in the diagram above, the underlay network is composed of a conventional layer 3 infrastructure, which may use IPv4 or IPv6 as the principal addressing and routing mechanism. VXLAN creates an overlay network on top of this by encapsulating Ethernet frames inside user datagram protocol (UDP) packets, enabling them to be tunneled across the IP network. These VXLAN tunnels interconnect endpoint switches, allowing them to connect end devices, including hosts, virtual machines (VMs), containers, workflows, or any other end device entity. The result is a flexible, scalable, and highly adaptable layer 2 infrastructure that can be deployed on top of any layer 3 network. This makes it ideally suited for modern data centers, cloud environments, and virtualization environments where scalability, mobility, and isolation are critical requirements. ### **Advantages of VXLAN** VXLAN is designed to overcome the limitations associated with the application of conventional network segmentation in data centers, clouds, and virtualized platforms. It offers numerous benefits, including: - **Larger segmentation range:** VXLAN technology uses a 24-bit VXLAN network identifier (VNI), allowing the technology to support up to 16 million unique network segments, far surpassing the 4,096 limit imposed by VLANs. This makes it highly effective in multi-tenant and large-scale environments. - **Layer 2 extension:** VXLAN is able to span layer 2 segments across any geographical distribution, making it highly flexible, especially in virtualized and cloud environments. - **Support for VM mobility:** As virtualized workloads increase, the ability to move them across different hosts, racks, or even data centers becomes increasingly important. VXLAN facilitates this mobility while maintaining consistent network policies and connectivity. ### **VXLAN for VoIP and UC** As VoIP and UC applications increasingly leverage virtualization and cloud deployments, technologies such as VXLAN are becoming all the more important to support and deliver them. Real-time communication applications depend upon network infrastructure that ensures low latency, minimal jitter, and reliable delivery. VXLAN supports these needs in multiple ways, such as: - **Segmentation:** The primary function of VXLAN is a high level of segmentation. By assigning different VNIs to different types of traffic—such as voice, video, and signaling—VXLAN enables the logical separation of real-time communication streams, thus prioritizing traffic and preventing it from being affected by other types of traffic. - **Mobility:** VXLAN’s mobility capabilities support user and device mobility, allowing hardware and software endpoints to move between sites without breaking sessions or requiring complex reconfigurations. - **Preserving QoS:** VXLAN can preserve [DSCP markings](https://info.teledynamics.com/blog/qos-for-voip-networks-intserv-versus-diffserv) during encapsulation to ensure that QoS policies applied in the underlay continue to prioritize voice and video traffic appropriately. - **Multi-tenant support:** UC and VoIP services extensively use multi-tenancy arrangements. Hosted or cloud-based deployments benefit greatly from VXLAN's capability of isolating and managing voice traffic for multiple customers securely and efficiently. ### **Conclusion** Applications and networks are constantly evolving, and the need for scalable, flexible, and efficient infrastructure is growing with them. That’s especially the case for real-time applications like VoIP and UC in cloud and virtual environments. VXLAN addresses the limitations of conventional layer 2 designs, offering unmatched scalability and segmentation capabilities. --- You may also like: [How to create VLANs with Grandstream GWN7800 series switches](https://info.teledynamics.com/blog/how-to-create-vlans-with-grandstream-gwn7800-series-switches) [Minimize jitter, latency and other UC issues through proper routing](https://info.teledynamics.com/blog/minimize-jitter-latency-and-other-uc-issues-through-proper-routing) [Layer 2 or 3? Choose the right switch for optimal network performance](https://info.teledynamics.com/blog/choose-the-right-switch-for-optimal-network-performance)   Topics: [Network Design](https://info.teledynamics.com/blog/topic/network-design), [Unified Communications](https://info.teledynamics.com/blog/topic/unified-communications), [VLAN](https://info.teledynamics.com/blog/topic/vlan), [Network Infrastructure](https://info.teledynamics.com/blog/topic/network-infrastructure) ### Comments ## Welcome to our Think Tank In this blog you'll read our thoughts on business telephone systems. While a lot has changed in telecom since TeleDynamics was founded in 1981, we remain as committed as ever to delivering the best customer service in the industry. If you would like elaboration on a specific topic, please let us know in the comments section. 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