Underlay and Overlay concept in Networking for beginners

Underlay and Overlay concept in Networking for beginners : Consider that you leave from home for your office, you must be using the road to get there. Now your neighbour using the same road,  but may be going to shopping mall or to a park. While driving you are acting like one overlay on the road around you and your neighbour is another overlay. Perhaps your overlay path on that road is “going to work” and your neighbours overlay for the day is to go to the park. But you both are using the same underlying infrastructure like the road in this case but doing completely different things. Means you both are utilising the underlay for completely different purpose. Likewise there are hundreds or thousands of people using the same road but going to different places.

You can consider yourself as one instance using the underlay like thousands of other people acting as another instance using the same underlay called as road in this case.

Now wear your Networking hat and think. There can be an application which act as an instance uses the network as underlay and perform its job (Similar road but built with routers and switches this time). Likewise, there could be another application using the Network for completely different purpose. Like this, there are hundreds or even thousands of these applications using the Network as an underlay and performing completely different tasks. 

Concept of some overlay functionality on a physical set of Networking gear is very common. GRE, L3VPN, L2VPN, SD-ACCESS are all sort of overlay networks. EVPN is an another one, Check out our series on EVPN to understand more