Difference between Underlay and Overlay Networks

Today I am going to talk about the underlay and overlay networks and protocol used for these purposes. Most of the software defined networks are based on the underlay and overlay both in order to achieve the separate control and data planes in the network. Earlier we have the control and data plane within the same physical boxes but now separating data plane with the control plane is a huge shift of the design now a days.

As many of you already know about the underlay networks or so called Physical networks where your traditional protocols are working. Let’s talk a little on underlay network.

Underlay network
The underlay network is described by the physical devices and can be switches and routers in the network. All network components of the underlay must determine IP connectivity via the use of a routing protocol. The protocol used on the underlay devices are like OSPF, IS-ISBGP for routing purposes.

For underlay network to setup a well-designed Layer 3 foundation inclusive of the campus edge switches to ensure performance, scalability, and high availability of the network.

Though there are many alternative routing protocols, the IS-IS selection offers operational advantages such as neighbor establishment without IP protocol dependencies, peering capability using loopback addresses, and agnostic treatment of IPv4, IPv6, and non-IP traffic.

Underlay Protocols : BGPOSPFIS-IS, EIGRP

Hope you understand the basics of the underlay network, Now let’s talk about the Overlay network which makes SDN story by automate the configuration through the controller.

Fig 1.1- Underlay and Overlay Networks
Overlay network
An overlay network is formed on top of the underlay in direction to construct a virtualized network. The data plane traffic and control plane signaling is controlled within each virtualized network, upholding segregation between the networks in accumulation to freedom from the underlay network. Most of the instances you generate fabric by implements virtualization and encapsulating user traffic in overlay networks using IP packets that are sourced and ended at the boundaries of the fabric.

The fabric boundaries comprise borders for incoming and outgoing to a fabric, fabric edge switches for wired clients, and fabric APs for wireless clients. Overlay networks can run across all or a subset of the underlay network devices.

Numerous overlay networks can run through the same underlay network to provision multitenancy through virtualization. Each overlay network performs as a Virtual Routing and Forwarding (VRF) instance for joining to external networks. You reserve the overlay separation when spreading the networks outside of the fabric by using VRF-lite, preserving the network separation within devices associated to the fabric and also on the links between VRF-enabled devices.


Overlay Protocols : VXLAN, NVGRE, GRE, OTV, OMP, mVPN and many more.