As is always the case, businesses and service providers rely on and require networks that need to be fast, scalable, and resilient.

However, as networks grow, they all kinds of challenges—from managing multi-location connectivity to ensuring efficient data flow and maintaining security and isolation.

Unfortunately, traditional networking models struggle to keep up with the demands of cloud computing, large-scale data centers, and modern applications.

However, this is where BGP-EVPN comes to the rescue. A solution designed to streamline network operations, enhance scalability, and optimize traffic flow.

Whether you’re an IT manager, a network engineer, or simply someone curious about how modern networks stay flexible and reliable, this blog will walk you through:

How BGP-EVPN works
Why BGP-EVPN matters
How BGP-EVPN integrates with VXLAN

How does BGP-EVPN work?

Modern data centers and enterprise networks need scalable, efficient Layer 2 and Layer 3 connectivity across multiple sites.

            Internet (BGP)
                  |
   ---------------------------------
   |                                |
DC1 Spine Router            DC2 Spine Router
   |                                |
   |----------BGP-EVPN Peering------|
   |                                |
DC1 Leaf Switch             DC2 Leaf Switch
   |                                |
DC1 Server                    DC2 Server

L2 supports traditional Layer 2 Ethernet connectivity in EVPN, but over large-scale networks, using VXLAN tunneling. This enables workload mobility and multi-tenancy across data centers.

L3 in EVPN facilitates routing and segmentation across different networks, ensuring scalability and optimized traffic flow without excessive broadcasts.

Border Gateway Protocol – Ethernet VPN solves this by providing a control plane for multi-tenancy, workload mobility, and optimized traffic flow. Ideal for cloud providers, SDN architectures, and large-scale deployments, BGP EVPN integrates with VXLAN to extend L2 over L3, reducing network complexity and improving automation.

BGP EVPN is an extension of the Border Gateway Protocol BGP, that leverages Multiprotocol BGP to distribute endpoint reachability information and provide efficient and scalable Ethernet-based VPN solutions.

Widely adopted in data centers and service provider environments, BGP EVPN automates the creation of VXLAN tunnels, addressing the need for flexible, multi-tenant connectivity and easy workload mobility.

What is VXLAN

Virtual Extensible LAN, specified in RFC 7348 is a L3 encapsulation protocol, designed to address the scaling limitations of traditional VLANs in modern data centers.

The issue with classic VLANs: while effective for segmenting networks, they provide only a limited number of identifiers (4,096) and have difficulties in spanning L2 domains over larger L3 networks.

VXLAN resolves these challenges by extending L2 connectivity over a L3 underlay network, offering scalability, flexibility, and improved performance for virtualized environments.

Why does VXLAN matter in data centers?

Applications often depend on microservices – a type of architecture that breaks applications into independent, modular services, that interact dynamically.

These microservices are typically distributed across multiple servers, racks, or data centers, meaning, seamless communication between them is essential. Furthermore, many microservices rely on Layer 2 connectivity to ensure efficient communication and smooth workload mobility.

VXLAN addresses this need by encapsulating Ethernet frames within UDP packets, allowing them to travel across a Layer 3 network while maintaining Layer 2 functionality.

By enabling Layer 2 connectivity over a Layer 3 infrastructure, VXLAN not only ensures efficient microservice communication but also lays the foundation for network overlays. These overlays provide scalability, segmentation, and flexibility, making them essential for modern data centers and cloud environments.

A quick detour into network overlays: Network overlays are created by encapsulating traffic into a tunneling protocol. Tunneling essentially encapsulates one network protocol within another, creating a “tunnel” for the original data. Here, VXLAN (Virtual Extensible LAN) encapsulates L2 Ethernet frames into L3 UDP packets. This encapsulation enables L2 networks, such as VLANs or subnets, to extend across a L3 infrastructure, like an IP-based data center or WAN.

VXLAN further relies on Virtual Tunnel Endpoints located in servers or network switches. A VTEP is a network component (a physical switch, virtual switch, or software-based node) that processes VXLAN traffic by adding and removing encapsulation. This allows devices in separate L2 networks to communicate seamlessly over a L3 infrastructure. This process ensures that microservices remain interconnected, regardless of their physical locations.

All-in-all, VXLAN is considered essential for microservices and distributed systems, because it:

Supports protocols like ARP and multicast (commonly used for service discovery and communication)
Provides scalability – with its support for over 16 million unique identifiers (VNIs),
Provides network segmentation for isolating tenant traffic
Increases operational efficiency by extending L2 networks over L3 infrastructures

By ensuring smooth communication between distributed services, VXLAN offers the flexibility & scalability that modern applications require.

What is MP-BGP?

In old-school networking, BGP-4 peers exchanged routing information through Update messages.

These messages inform about reachable routes, sharing the same path attributes, with the routing data carried in the Network Layer Reachability Information field.

The issue: the scope of BGP-4 was limited to handling only IPv4 unicast routing information.

To meet the increasing demand for diverse network layer protocols, such as IPv6 & multicast, the Multiprotocol Border Gateway Protocol was developed. MP-BGP is an extension of traditional BGP, enabling it to support multiple address families, including IPv6, multicast, and EVPN.

Address families refer to different network protocol types or services that MP-BGP can route, providing flexibility to accommodate various networking needs beyond traditional IPv4 routing.

The protocol achieves this by introducing new formats for Network Layer Reachability Information (NLRI).

MP-BGPs in data centers

MP-BGP became an important component in modern data centers due to its ability to scale and efficiently distribute routing information. When integrated with VXLAN & EVPN, MP-BGP serves as the control plane for distributing L2 and L3 reachability information.

What makes MP-BGP ideal for data centers is:

Protocol versatility, due to its support for multiple address families, including EVPN
Scalability, for efficient advertisement of MAC and IP addresses across large networks
Policy control, for detailed control over routing policies and optimal traffic flows

MP-BGP, however, failed short in providing the flexibility and efficiency needed for L2 and L3 VPN services. To address this gap (enhanced network segmentation, optimized traffic flow, or improved redundancy), EVPN was developed and came to the rescue.

   BGP (Control Plane) - backbone protocol that distributes routing information across networks
          ↓
   MP-BGP (Multi-Protocol) - supports multiple address families (including EVPN)
          ↓
   EVPN (Ethernet VPN) - multi-tenancy, workload mobility, and optimized MAC/IP routing
          ↓
   VXLAN (Encapsulation) - L2 traffic into L3 packets, enabling data center overlays
          ↓
Underlay Network (IP Fabric) - physical infrastructure that supports VXLAN tunnels

What is EVPN?

The original VXLAN specification lacked a control plane, requiring manual configuration of VXLAN tunnels and relying on flood-and-learn mechanisms to discover MAC addresses.

The problem: this directly caused significant overhead in large-scale networks and complicated scaling.

To address these issues, the Ethernet Virtual Private Network was introduced as a standards-based control plane for VXLAN.

EVPN leverages MP-BGP to distribute MAC and IP address information, providing a more scalable and efficient solution for large deployments.

How does MP-BGP EVPN help VXLAN?

Because MP-BGP EVPN serves as the control plane for VXLAN, it enables automated and efficient learning of MAC and IP addresses. F

Automated VTEP discovery, where MP-BGP EVPN allows VTEPs to automatically discover each other and establish VXLAN tunnels.
Efficient routing, since instead of flooding the network to discover MAC addresses, MP-BGP EVPN advertises this through simpler BGP updates.
Integrated L2 and L3 connectivity, because EVPN supports both MAC address learning and IP routing, providing seamless integration of Layer 2 and Layer 3 services.
ARP suppression, which reduces broadcast traffic by advertising ARP information through the control plane.
Scalability & flexibility: BGP’s proven scalability ensures that MP-BGP EVPN can support large, multi-tenant data center environments.

BGP-EVPN has become the foundation of modern data center and WAN architectures, providing a scalable, efficient, and flexible solution for Layer 2 and Layer 3 VPNs.

By using MP-BGP as the control plane, BGP-EVPN improves network efficiency by reducing broadcast traffic, optimizing routing, and enabling seamless multi-tenancy. All of these are essential for today’s cloud-centric infrastructures.

Data centers, SONiC & orchestration

With the growing adoption of SONiC, open networking, and multi-cloud environments, the role of BGP-EVPN will continue to expand, offering a standardized approach to network segmentation, automation, and intent-driven operations.

However, managing large-scale BGP-EVPN networks is complex, requiring advanced automation to streamline provisioning, ensure real-time validation, and maintain operational consistency.

Built for modern network fabrics, SandWork automates BGP-EVPN overlays, providing intent-based orchestration, real-time reconciliation, and seamless fabric lifecycle management.

By integrating VXLAN provisioning, automated validation, and network-wide configuration changes, SandWork empowers enterprises, service providers, and hyperscalers to operate resilient, scalable, and future-ready networks with minimal manual effort.

FAQ

1. What problem does VXLAN solve?

VXLAN overcomes the scalability limitations of VLANs by enabling over 16 million unique segments. It also extends Layer 2 networks over a Layer 3 underlay, supporting geographically distributed workloads.

2. How does MP-BGP EVPN enhance VXLAN?

MP-BGP EVPN provides a control plane for VXLAN, enabling dynamic and efficient learning of MAC and IP addresses. This replaces the flood-and-learn mechanism, reducing overhead and enhancing scalability.

3. Why is VXLAN-EVPN important for microservices?

Microservices often require Layer 2 connectivity for communication and service discovery. VXLAN-EVPN provides seamless Layer 2 overlays over Layer 3 networks, enabling efficient communication between distributed microservices.

4. How does PANTHEON.tech support VXLAN-EVPN deployments?

PANTHEON.tech offers solutions like SandWork, which simplifies the orchestration and management of VXLAN-EVPN networks, and LightSpeed, which validates the performance of these networks.

5. Is VXLAN-EVPN suitable for small enterprises?

While VXLAN-EVPN is often associated with large-scale data centers, its benefits—scalability, agility, and security—make it valuable for enterprises of all sizes. Small enterprises adopting cloud-native architectures can particularly benefit from its flexibility.

Related Products from PANTHEON.tech

SandWork: A network orchestration platform designed for managing complex data center environments, including VXLAN and MP-BGP EVPN deployments. It simplifies the automation and management of large-scale data center networks.

Custom Solutions: Tailored networking solutions to address specific enterprise needs, ensuring optimal performance and scalability.

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(Updated 3/2025)