VXLAN, which stands for Virtual Extensible LAN, is a network virtualization technology. It allows for the creation of large numbers of virtualized Layer 2 subnets over an underlying Layer 3 network. By encapsulating MAC addresses in UDP packets, VXLAN overcomes the traditional VLAN limits and provides greater scalability and flexibility, especially in cloud environments. This makes it easier to move and manage workloads within and across data centers without being constrained by physical network configurations.

VXLAN is an open standard and thus can be deployed across equipment of multiple vendors.