Networks - Overlay Network

An overlay network in the context of computer networking is a virtual network that is built on top of another network. Nodes in the overlay network are connected by virtual or logical links, each of which corresponds to a path, perhaps through many physical links, in the underlying network.

Overlay networks essentially abstract the underlying network infrastructure to create a new network layer. This is useful for implementing new protocols and services without changing the underlying network. They often have their own routing and management protocols optimized for specific purposes, such as efficient data delivery, security, or network virtualization. Because they are software-based, overlay networks can easily be scaled up or down and modified to adapt to changing needs or conditions.

Some common examples of technologies that are used to create overlay networks include VPNs, VXLAN, OTV, MPLS, and SD-WAN among others. Overlay networks are also heavily involved in technologies that are used to span Layer 2 networks across remote sites.

The network on top of which an overlay network is built is called the underlay network.