• The vSwitch is the bridge between VMs and the physical or overlay network
  • The VFP is injected into the vSwitch as a filtering extension
  • The HNS translates logical network intents into host-applied configurations

  • 3. VXLAN Basics: Format, Function, and Flow

    VXLAN Packet Format

    #image_title

    • Isolation across tenants and subnets
    • Flexible IP address reuse
    • Seamless east-west and north-south communication

    2. Azure Local SDN Architecture Recap

    Core Components

    Component Description
    Network Controller Central SDN brain; distributes intent-based policy across hosts
    Host Agent On-host SDN agent that receives and enforces NC policy
    vSwitch Hyper-V Virtual Switch; core data path connecting vNICs to VFP, HNS, NIC
    VFP Kernel-mode filtering engine attached to vSwitch
    HNS Host Networking Service; configures host-level virtual networks and endpoints
    SLB Mux/Agent Software Load Balancer for SNAT, DNAT, and load distribution

    Flow Hierarchy on Host (Simplified)

    #image_title

    VM1

    vSwitch

    VFP (ACL/NAT/Bandwidth policies)

    Local Routing (same vSwitch instance)

    VM2

    • Encapsulation: ❌ None
    • vSwitch Role: Internal bridging and enforcement
    • VFP Role: Policy decision and enforcement per SDN Controller

    5. East-West Packet Walkthrough: Cross Host

    Scenario

    VM1

    vSwitch

    VFP → Encapsulate (VXLAN)

    NIC → Network → HostB NIC

    VFP → Decapsulate

    vSwitch

    VM2

    • Encapsulation: Required
    • vSwitch Role: Entry/exit point, port policies
    • VFP Role: Encapsulation, routing, policy enforcement

    6. Ingress & Egress: VM ↔ Physical Network

    6.1 VM → Internet (Egress)

    1. VM packet enters vSwitch
    2. Processed by VFP, NAT performed via SLB Agent
    3. VXLAN-encapsulated packet sent to SDN Gateway
    4. Decapsulated and routed to TOR switch

    Overlay networking enables virtual workloads to communicate over an abstracted logical network, regardless of physical IP schema or host location. How about we perform a day in the life of a packet? In Azure Local SDN, VXLAN (Virtual Extensible LAN) is used to encapsulate tenant packets, enabling:

    *The thoughts and opinions in this article are mine and hold no reflect on my employer*

    author avatar
    Paul Bryant

    I’m presently the Global Virtualization Architect at Dell Technologies leading the hybrid cloud and digital transformation initiative. I have 14+ years of technology experience starting as a engineer with 3-2-1 architectures and becoming a SME in the SDDC.

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