What Is a Network Overlay

An overlay network is the use of software to create layers of network abstraction to run multiple separate, discrete virtualized network layers on top of the physical network.

Why do we need overlay networks?

Simply put, an overlay network is a virtual network of nodes and logical links, which are built on top of an existing network. … The aim of an overlay network is to enable a new service or function without having to reconfigure the entire network design. The internet, for example, is the most widely used overlay network.

What are the types of overlay network?

Many Forms of Network Overlays and Protocols Overlay networks can take on many forms, including peer-to-peer networks, IP networks, and virtual Local Area Networks (vLANs). The Internet itself, which uses layer-3 IP addressing, is an overlay network itself, as endpoints are designated by their IP addresses.