It is a fact that one of the significant benefits of VxLAN is scalability. But when you can span layer 2 networks across IP network infrastructure, there are also many more benefits.
Scalability and flexibility: VxLAN improves the scalability in a network or virtualized data center, and it also makes its fabric more flexible. The number of VLAN layer 2 identifiers are drastically increased from 4,000 to 16 million.
Segmentation and Multi-tenancy: VxLAN provides a high level of security by segmenting the network. The VxLAN traffic is limited to VNI, so it is isolated. This segmentation can also help in multi-tenant architectures, where a single infrastructure must be shared.
Layer 2 Simplification. Simplify the network and reduce the need for layer 2 Spanning Trees, Trunking, and VLAN stretching.
Allow IP Mobility: VMs can be migrated from a host in a subnet to another host in another subnet without having to change the IP address.
Layer 2 and layer 3 Connectivity. A virtual layer 2 running VNIs is built upon a layer 3 infrastructure running IP. VxLAN switches encapsulate layer 2 frames into layer 3 packets.
It is a Software-Defined Network (SDN). VxLAN decouples the central network controller (virtual network) from the data plane (physical network). Having a centralized controller simplifies network management, deployment, and monitoring. An example of a software-based virtual network switch that supports VxLAN overlays is Open vSwitch.
Hardware Support: Although it is more common to run VxLAN in software, some platforms implement it in hardware through ASICs.
It is a standard: VXLAN is a technical standard. When you implement it, you are not locked by any vendor.
