Introduction to overlay and underlay networks

The following diagram represents the typical service provided by OVS in a virtual machine environment:

Server1 and Server2 are the two physical servers wherein the customer applications are deployed inside the VM. There are two VMs in each server as VM1 and VM2. The green VM belongs to one customer and the orange VM belongs to another customer. A single instance of OVS is running in each of the servers.

In a typical virtualization environment, there are two kinds of network devices: the soft switch, which provides connectivity to the virtualization layer, and the physical switch, which provides connectivity to the physical infrastructure (such as servers, switches, and routers).

The OVS switch provides connectivity to the VMs/containers running inside the server instance. These server instances are also connected to each other physically in order to provide connectivity for all the servers.

The physical network that provides connectivity for the...