An overlay network is a virtual network built on top of another network (the “underlay network”). The overlay network uses the underlying network’s infrastructure to create a new network layer, allowing for additional functionality such as routing, security, and network segmentation.

An example of an overlay network is a virtual private network (VPN), which creates an encrypted tunnel on top of the public internet. The underlay network is the physical infrastructure that the overlay network runs on.

SD-WAN is used by a wide variety of industries, especially ones with many remote sites and workers, and relies heavily on cloud-based applications. Some industries that commonly use SD-WAN include education, healthcare, finance, telecoms, service provision, retail, and manufacturing.

Let’s dive in to discover what the overlay-underlay of SD-WAN entails or has to offer.

The Overlay-Underlay Structure Of SD-WAN

In the context of SD-WAN, the “overlay network” refers to the virtualized network created on top of the underlying physical WAN infrastructure. This virtualized network provides the added functionality and benefits of SD-WAN, such as dynamic traffic routing, improved application performance, and increased security.

Some of the critical components of the overlay network in SD-WAN include:

  • Virtual routing and forwarding (VRF) tables: These tables are used to route network traffic between different sites and services and can be configured to prioritize certain types of traffic or route traffic over specific WAN connections.
  • Virtual private networks (VPNs): SD-WAN can use VPNs to create encrypted tunnels for secure communication between different sites and services.
  • Quality of Service (QoS) policies: SD-WAN can use QoS policies to ensure that critical traffic, such as voice and video, is given priority over less critical traffic, such as file transfers and email.

On the other hand, the “underlay network” in SD-WAN refers to the physical WAN infrastructure on which the overlay network runs. This includes various WAN connections such as broadband, cellular, and MPLS.

Some of the critical components of the underlay network in SD-WAN include:

  • WAN connections: These are the physical connections that link different sites and services together and can consist of a variety of connection types, such as broadband, cellular, and MPLS.
  • Routers: These devices connect different sites and services and forward traffic between them.
  • Network management and monitoring tools: These tools are used to monitor and manage the underlying physical WAN infrastructure.

In summary, the overlay network in SD-WAN provides the added functionality and benefits of SD-WAN. In contrast, the underlay network is the physical infrastructure on which the overlay network runs.

 The Benefits Of SD-WAN

SD-WAN is a powerful networking solution that offers several benefits due to its overlay-underlay structure. By creating a virtualized network on top of the underlying physical WAN infrastructure, SD-WAN allows for more efficient use of resources, improved application performance, and increased security.

1. Improved Application Performance

The overlay network in SD-WAN allows for dynamic traffic routing based on the available bandwidth, quality of service, and security policies. This means that network traffic can be directed over the best available path in real-time. Improving application performance and reducing latency and jitter.

2. Enhanced Security

The overlay network in SD-WAN allows for enforcing security policies at the edge of the network. This can include features such as VPN, firewall, and intrusion detection and prevention, which can be centrally managed and enforced. This can help protect the network from threats and breaches and allow for easier compliance with industry regulations for storage and enterprise data access.

3. Improved Resiliency

The overlay network in SD-WAN allows for automatic failover between different WAN connections in case of a failure. This can help ensure that network traffic continues to flow even in the event of a WAN outage, improving the network’s resiliency.

4. Greater Granularity of Traffic Routing

The overlay network in SD-WAN allows for granular control over how traffic is routed between different sites and services. This can include routing specific types of traffic over clear WAN connections or prioritizing certain types of traffic over others. This allows for more efficient use of resources and improved application performance.

5. Increased Scalability

The software-based approach of SD-WAN allows for easy network scaling as the business grows or changes. This can include adding new sites or remote workers or changing the types of WAN connections. The centralized management and control of the network make it easy to manage and scale the network as needed.

6. Improved Cost Efficiency

The flexibility of the underlay network in SD-WAN allows for cost-effective WAN solutions, as businesses can use less expensive broadband connections for less critical traffic and reserve more expensive MPLS connections for critical traffic. Additionally, the network’s ease of management and scalability can help reduce the administrative overhead and costs associated with managing a WAN infrastructure. This can result in cost savings for the business in the long run. 

Overall, the overlay-underlay structure of SD-WAN allows for more efficient and flexible use of resources. improved application performance, enhanced security, and ease of management, making it a valuable solution for businesses and organizations looking to optimize their WAN infrastructure.

To Wrap Up: Augment Your SD-WAN To Get the Full Benefits of a Virtualized Network

SD-WAN is a virtualized network that improves application performance, security, and cost-efficiency by allowing dynamic traffic routing, automatic failover, and granular control over traffic. It requires technical expertise to manage and maintain, and it’s essential to have the necessary resources and expertise in place or outsource to a managed service provider.

Note that while SD-WAN can improve the performance and security of a WAN infrastructure, it is not a replacement for other security measures such as firewalls, intrusion detection and prevention systems, and network segmentation.

For instance, some organizations or businesses may benefit more from MPLS, necessitating an evaluation of SD-WAN vs. MPLS to determine which options work best.

Lastly, it’s important to note that more than SD-WAN is needed to ensure high-quality and reliable network performance. As it depends on the underlying network infrastructure and the quality of service your ISP provides.