VXLANs

You can use VXLANs to connect VM instances across non-contiguous Layer 2 segments (that is, Layer 2 segments connected by one or more Layer 3 routers).

A VXLAN is a Layer 2 overlay network scheme on a Layer 3 network infrastructure. Packets originating from VMs and destined for other VMs are encapsulated with IP, UDP, and VXLAN headers and sent as Layer 3 packets. The IP addresses of the source and destination compute nodes are included in the headers.