The introduction of a network virtualization brings several benefits:

Scalability:

• VXLAN uses a 24-bit network identifier that allows you to use up to 16 million Layer 2 segments
• Reduces the number of MAC addresses on the physical devices, increasing the consolidation ratio from a network prospective
• Allows you to create a logical Layer 2 domain across physical servers located on different physical L2 domains

Performance:

• With the VXLAN, the broadcast traffic is controlled using the multicast protocol, reducing the storm effect on the physical network devices. It has also introduced an ARP suppression system with NSX that allows you to reduce the ARP traffic on the network.
• In conjunction with the VXLAN, it is possible to use the distributed router. This technology allows you to use the hypervisor to route traffic between logical segments.

Automation:

• With the VXLAN, it is possible to use a REST API call to add new networks without interacting with the physical devices