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Figure 2-67:
Address space concepts 
If we did not have these subnets isolated, we would get in a lot of trouble on our networks and things 
certainly would not work properly. However, because network virtualization isolates the IP address 
space, they can coexist easily on the same physical network. First, take the Blue network in Figure 
2-67, or the Red network; these address spaces signify the Customer Address (CA) Space. For them to 
communicate between hosts across a physical network, they must be encapsulated via a common 
IP subnet. This common subnet that connects the host is called the Provider Address (PA) Space. 
Essentially, what then happens is the CA Space is mapped to an IP address in the PA space, and when 
VMs allocated to the CA space want to communicate across hosts, they do so via their mapped IP in 
the PA space. 
How this mapping happens depends on the type of technology you use. In network virtualization, you 
can use VXLAN or NVGRE 
The following is an extract from Technet (
https://technet.microsoft.com/library/mt238303.aspx
) 
detailing VXLAN and NVGRE: 
The Virtual eXtensible Local Area Network (VXLAN) (RFC 7348) protocol has been widely adopted in the 
market place, with support from vendors like Cisco, Brocade, Arista, Dell, HP, and others. The VXLAN 
protocol uses UDP as the transport. The IANA-assigned UDP destination port for VXLAN is 4789 and the 
UDP source port should be a hash of information from the inner packet to be used for ECMP spreading. 
After the UDP header, a VXLAN header is appended to the packet which includes a reserved 4-byte field 
followed by a 3-byte field for the VXLAN Network Identifier (VNI) 
–
 VSID 
–
 followed by another reserved 
1-byte field. After the VXLAN header, the original CA L2 frame (without the CA Ethernet frame FCS) is 
appended. 
NVGRE is used as part of the tunnel header. In NVGRE, the VM’s packet is encapsulated within another 
packet. The header of this new packet has the appropriate source and destination PA IP addresses in 
addition to the VSID, which is stored in the Key field of the GRE header, as shown in Figure 2-68. 

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67 
CHAPTER 2 | Software-defined datacenter