Difference Between Overlay And Underlay Network In Tabular Form
| BASIS OF COMPARISON | UNDERLAY NETWORK | OVERLAY NETWORK |
| Description | Underlay Network is physical infrastructure above which overlay network is built. | An Overlay Network is a virtual network that is built on top of an underlying Network infrastructure/Network layer (the underlay). |
| Traffic Flow | Transmits packets which traverse over network devices like switches and routers. | Transmits packets only along the virtual links between the overlay nodes. |
| Deployment Time | Less scalable and time consuming activity to setup new services and functions. | Ability to rapidly and incrementally deploy new functions through edge-centric innovations. |
| Packet Control | Hardware oriented. | Software oriented. |
| Packet Encapsulation And Overhead | Packet delivery and reliability occurs at layer-3 and layer-4. | Needs to encapsulate packets across source and destination, hence incurs additional overhead. |
| Multipath Forwarding | Less scalable options of multipath forwarding. In fact using multiple paths can have associated overhead and complexity. | Support for multi-path forwarding within virtual networks. |
| Managing Multitenancy | NAT or VRF based segregation required which may face challenge in big environments. | Ability to manage overlapping IP addresses between multiple tenants. |
| Scalability | Less Scalable due to technology limitation. | Designed to provide more scalability than underlay network. E.g VLAN (Underlay Network) provides 4096 VLAN support while VXLAN (Overlay Network) provides up to 16 million identifiers. |
| Packet Delivery | Responsible for delivery of packets. | Offloaded from delivery of packets. |
| Protocols | Underlay protocols include Ethernet Switching, VLAN, Routing etc. | Overlay network protocols include Virtual Extensible LAN (VXLAN), Network Virtualization using Generic Encapsulation (NVGRE), Stateless Transport Tunneling (STT), Generic Routing Encapsulation (GRE), IP multicast and Network Virtualization overlays 3 (NVO3). |
Old protocols = VLANs and MPLS, are now replaced by VXLAN which is more scalable .
Ref: https://vivadifferences.com/10-difference-between-underlay-and-overlay-networks/