vSphere VXLAN networks are based on the IETF draft VXLAN standard. These networks support local-domain isolation equivalent to what is supported by vSphere isolation-backed networks.

When you create a provider vDC, a VXLAN network pool is created in vCloud Director. When you use this network pool, VXLAN virtual wires are created in vCenter Server.

This pool is given a name derived from the name of the containing provider vDC and attached to it at creation. You cannot delete or modify this network pool. You cannot create a VXLAN network pool by any other method. If you rename a provider vDC, its VXLAN network pool is automatically renamed.

vSphere VXLAN networks provide the following benefits.

Logical networks spanning layer 3 boundaries

Logical networks spanning multiple racks on a single layer 2

Broadcast containment

Higher performance

Greater scale (up to 16 million network addresses)

For more information on VXLAN in a vCloud environment, see the vShield Administration Guide.