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Figure 2-66
Network virtualization 
Figure 2-66 illustrates some key concepts. The first is the routing domain ID, or RDID. You also can 
consider this as the virtual network, such as in Azure. Each virtual network is the boundary of isolation 
in that network, meaning that only subnets within that virtual network can communicate with one 
another. Because a virtual network is Layer 3 (i.e., IP), it makes it easy to isolate the traffic between 
the different networks. The isolation is enforced through Network Virtualization Generic Route 
Encapsulation ID (NVGRE ID) or Virtual Extensible Local Area Network (VXLAN) Network Identifier 
(VNI) field. In each routing domain, we can have multiple virtual subnets (VSID), and they have the 
ability to communicate with one another. In Figure 2-66, RDID 1 has three subnets, each with different 
VSIDs. If VSID 5001 wants to communicate with VSID 5002, it is possible via Layer 2 to forward within 
the virtual switch. When the packet traverses the switch, it becomes encapsulated and mappings are 
applied (encapsulation header), and then it is sent to the destination Hyper-V port or destination 
switch. To summarize, if traffic has the same RDID, it can be forwarded between VSIDs; if the RDIDs 
are different, you need to make use of a gateway. 
For network administrators who are used to the concepts such as Address Resolution Protocol (ARP) 
broadcast, Media Access Control (MAC) addresses, and broadcast domain, these concepts all 
technically still apply but now fall into specific buckets. For example, if we take VSID 5001, it can 
be considered to be a broadcast domain or VLAN. Now, if two machines in VSID 5001 want to 
communicate with each other, they look up a MAC address via an ARP query to the Hyper-V switch. 
The Hyper-V switch has a Hyper-V port for every network adapter in a VM, and we know that every 
network adapter has a MAC address. The Hyper-V switch will keep a lookup table or ARP table of 
these entries so that if an ARP query comes in, it knows to which destination to switch the traffic. If no 
entry exists, it will generate an ARP broadcast in an attempt to find what port hosts the computer to 
which it wants to send the traffic. This subnet or VSID will also have an IP subnet allocated to it, 
something like 192.168.0.0/24, which could be a subset of the virtual network allocation of 
192.168.0.0/16. 
Hyper-V Network virtualization on a single host is a relatively easy concept. However, when you 
introduce multiple hosts that span the datacenter and you want to honor the RDID and VSID of 
isolated networks and subnets across the datacenter, the topic becomes a little more complex and 
you must introduce some address space concepts. Figure 2-67 shows a basic concept in which there 
are multiple subnets that overlap one another. 

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CHAPTER 2 | Software-defined datacenter