Geekflare is supported by our audience. We may earn affiliate commissions from buying links on this site.
In Networking Last updated: July 3, 2023
Share on:
Invicti Web Application Security Scanner – the only solution that delivers automatic verification of vulnerabilities with Proof-Based Scanning™.

Network segmentation plays an important role in managing and securing modern IT infrastructures.

Two popular technologies for effective network segmentation are VXLAN and VLAN.

Let’s dive in and understand the characteristics of both VXLAN & VLAN and how they can shape your network architecture.

What is VLAN?

Image Source: Wikipedia

VLAN stands for Virtual Local Area Network.

It is a technology used in computer networks to divide a single physical network into multiple logical networks.

Let’s consider an example to understand the concept easily.

Imagine you work in a large office building with multiple departments: Engineering, Marketing, and Accounting.

Each department has its own set of computers, printers, and other network devices.

However, the office building has only one physical network infrastructure.

Without VLANs, all devices in the office building would be part of a single broadcast domain. That means they would receive all network traffic. This could lead to security concerns and inefficient network traffic handling.

VLANs are implemented to overcome these issues. Each VLAN acts as a separate broadcast domain which enables better network management & performance.

Image Source – fiberopticshare

Let’s say you create three VLANs to correspond to the different departments.

VLAN 1: Engineering
VLAN 2: Marketing
VLAN 3: Accounting

When a computer or any other network device is connected to the network, it can be assigned to one of these VLANs.

For example – All computers and devices in the Engineering department are assigned to VLAN 1.

If a computer in the engineering department wants to send a message to another computer within the same VLAN, the message will stay within VLAN 1 and will not be broadcasted to devices in other VLANs like Marketing or Accounting.

This separation makes sure that sensitive information is only accessible to authorized devices within the same VLAN.

What is VXLAN?

VXLAN stands for Virtual Extensible LAN.

It is a network virtualization technology used to extend Layer 2 (data link layer) network segments over an IP network. It was introduced to address the limitations of traditional VLANs in large-scale data center environments.

Image Source – fiberopticshare

It is commonly used in data centers and cloud environments to create logical network overlays that can span multiple physical network segments.

VXLAN encapsulates Layer 2 Ethernet frames within Layer 3 UDP packets which allow them to be transmitted over an IP network.

How does VXLAN work?

Imagine you have a large data center with multiple physical servers and virtual machines (VMs) running on those servers.

In a traditional VLAN-based network, each VM would be assigned to a specific VLAN. And communication between VMs in different VLANs would require routing at Layer 3.

This approach can become complex and may suffer from scalability issues due to the limited number of available VLAN IDs.

Image source –

Let’s consider a scenario to understand how this VXLAN works.

There are 2 physical hosts. In host 1 there are VM1 & VM2, and in host2 there are VM3 & VM4.

Assume that Host 1 & Host 2 are part of a VXLAN-enabled network, and VM1 wants to communicate with VM3.

VXLAN Configuration

Host 1 and Host 2 are configured as VXLAN Tunnel Endpoints (VTEPs). That means they have the necessary software or hardware components to handle VXLAN encapsulation and decapsulation.

VXLAN Network Identifier (VNI)

A unique VNI is assigned to the virtual network. Let’s say the VNI for this network is 1001.


VM1, residing on Host 1 – wants to communicate with VM3, which is located on Host 2.

When VM1 sends a packet to VM3, it is encapsulated with a VXLAN header.

The VXLAN header includes the source and destination VTEP addresses (IP addresses of Host 1 and Host 2) and the VNI (1001).

Underlying IP Network

The encapsulated packet is transmitted over the underlying IP network – It can be IPv4 or IPv6. The IP network serves as the transport infrastructure for VXLAN packets.


Upon receiving the packet, the VTEP on Host 2 decapsulates the VXLAN header, which reveals the original Layer 2 Ethernet frame.

Delivery to VM3

After decapsulation, the VTEP delivers the Layer 2 Ethernet frame to VM3 on Host 2.

VM1 on Host 1 can communicate with VM3 on Host 2 as if they were connected to the same Layer 2 Ethernet network – even though they are located on different physical hosts.

VXLAN enables this communication by encapsulating and tunneling Layer 2 traffic over Layer 3 networks which allows for the extension of Layer 2 connectivity across network boundaries.

Benefits of VLAN


Broadcast Control

Broadcast traffic is contained within each VLAN, which reduces the overall broadcast domain size & mitigates the impact of traffic that can degrade network performance.


It enables network isolation and enhances security by separating different groups of users or devices into separate broadcast domains. This isolation restricts the scope of potential security breaches or unauthorized access, which improves overall network security.

Quality of Service (QoS)

VLANs can be used to implement Quality of Service mechanisms that allow network administrators to prioritize certain types of traffic or apply specific policies.
They can set the limit on which application should receive high bandwidth.

Simplified Network Management

Simplifies network management by logically dividing a large physical network into smaller virtual networks. This segmentation helps in organizing devices & simplifies network administration tasks.

Benefits of VXLAN


VXLAN addresses the limitations of traditional VLANs by allowing the creation of up to 16 million virtual networks – compared to the limited 4,096 VLANs. This scalability is achieved through the 24-bit VXLAN Network Identifier (VNI).

Network Segmentation

It enables efficient network segmentation by encapsulating Layer 2 Ethernet frames within UDP packets. This allows for the creation of isolated virtual networks that can span across physical boundaries, such as data centers or cloud environments.


It supports the multi-tenancy model, which allows different organizations to share the same physical infrastructure while maintaining their own isolated virtual networks.

Layer 2 Extension over Layer 3 Networks

VXLAN facilitates the extension of Layer 2 connectivity over Layer 3 networks.

This is important for building geographically distributed data centers and enables the mobility of virtual machines across different sites without the need for complex Layer 2 extension technologies like Virtual Private LAN Service (VPLS).

Comparison Table

And here is a comparison table between the VXLAN and VLAN.

EncapsulationUses UDP for packet encapsulation and transportNo encapsulation – relies on 802.1Q tagging
ScalabilitySupports up to 16 million virtual networksLimited to 4,096 VLANs
Network IsolationEnables isolated Layer 2 networks across Layer 3 boundariesProvides isolation within a Layer 2 network
Broadcast Traffic HandlingUses multicast or unicast-based replication to optimize broadcast trafficBroadcast traffic is propagated to all ports within the VLAN
Spanning Multiple SitesAllows the extension of Layer 2 networks across geographically dispersed locationsLimited to a single broadcast domain
ManagementRequires a VXLAN gateway for interconnecting virtual & physical networksCan be managed through VLAN-aware switches

Proper implementation of VXLAN requires VXLAN-capable devices that support the necessary protocols & encapsulation techniques.

VXLAN networks can be created and managed with the help of these devices.

On the other hand – VLANs are more widely used and simple to implement in current network infrastructures because the majority of network devices support them without the need for additional hardware or specialized support.

Use cases of VLAN


Server Virtualization

VLANs enable efficient network management by providing isolation between virtual machines residing on the same physical server in virtualized environments.

Data Centers

Used in server farms & data centers to manage large numbers of servers. It enables administrators to group servers based on their role or application.

Guest Networks

They create separate guest networks in environments such as hotels or corporate offices, which can provide internet access to visitors while keeping them isolated from the organization’s internal network.

Virtual Private Networks

VLANs are in conjunction with VPNs to create secure connections between geographically dispersed sites. Organizations can extend their private network across multiple locations while maintaining logical separation.

Testing and Development

Provide an isolated environment for testing & development purposes. Developers can create VLANs dedicated to testing new applications or services without affecting the production network.

Use cases of VXLAN


Data Center Interconnect

VXLAN is used to interconnect multiple data centers over a WAN. It extends the Layer 2 connectivity between data centers, which allows virtual machines and workloads to be migrated between sites while maintaining their network configuration.

Cloud Infrastructure

It is commonly used in cloud environments to provide network virtualization for cloud-based services & applications. It allows for efficient workload distribution across cloud infrastructure.

Overlay Networks

VXLAN serves as a foundation for overlay networks which allows network engineers to dynamically allocate resources and adapt to changing workload demands.

Disaster Recovery

Used in disaster recovery scenarios to provide network connectivity & failover (backup operational mode) between primary and secondary data centers.

Author’s Note✍️

The choice between VXLAN and VLAN depends on the specific needs of your network infrastructure. Both technologies have their advantages & considerations that should be taken into account.

If you require a scalable solution that can handle a large number of virtual machines or network segments – VXLAN is the recommended choice. It provides a larger address space and allows easier workload mobility.

If your network has a smaller scale & simpler requirements – then VLAN can be the best option. VLANs are well-established and widely supported in most network equipment. They are easy to configure and manage.

I hope you found this article helpful in learning about the difference between VXLAN and VLAN. You may also be interested in learning about network access control and how to implement it.

  • Ashlin Jenifa
    Hey there, my name is Ashlin, and I’m a senior technical writer. I’ve been in the game for a while now, and I specialize in writing about all sorts of cool technology topics like Linux, Networking, Security, Dev Tools, Data Analytics, and Cloud… read more
  • Narendra Mohan Mittal

    Narendra Mohan Mittal is a Senior Digital Branding Strategist and Content Editor with over 12 years of versatile experience. He holds an M-Tech (Gold Medalist) and B-Tech (Gold Medalist) in Computer Science & Engineering.

    read more
Thanks to our Sponsors
More great readings on Networking
Power Your Business
Some of the tools and services to help your business grow.
  • Invicti uses the Proof-Based Scanning™ to automatically verify the identified vulnerabilities and generate actionable results within just hours.
    Try Invicti
  • Web scraping, residential proxy, proxy manager, web unlocker, search engine crawler, and all you need to collect web data.
    Try Brightdata
  • is an all-in-one work OS to help you manage projects, tasks, work, sales, CRM, operations, workflows, and more.
    Try Monday
  • Intruder is an online vulnerability scanner that finds cyber security weaknesses in your infrastructure, to avoid costly data breaches.
    Try Intruder