Advantages and Disadvantages of Using VXLAN vs. VPLS in RouterOS 7

With the advancements in RouterOS 7, MikroTik has provided extensive support for network technologies like VXLAN (Virtual Extensible LAN) and VPLS (Virtual Private LAN Service). These technologies extend Layer 2 networks across Layer 3 infrastructures, but each has unique strengths and weaknesses, making them suitable for different scenarios.

1. Scalability:
   • VXLAN uses a 24-bit segment ID (VXLAN Network Identifier or VNI), allowing up to 16 million segments versus the 4096 VLAN ceiling.
   • Well-suited for large-scale environments where multi-tenant isolation is required.
2. Layer 3 Underlay:
   • VXLAN operates over a Layer 3 infrastructure, enabling more flexible network design.
   • Simplifies inter-site connectivity over IP/MPLS networks, reducing reliance on pure Layer 2 links.
3. Support for Modern Architectures:
   • Integrates cleanly with SDN-based designs.
   • Ideal for virtualized and cloud-native environments.
4. Efficient Multicast Handling:
   • VXLAN can leverage multicast in the underlay, reducing broadcast domain overhead.
   • Improves distribution efficiency for certain distributed workloads.
5. Hardware Offloading:
   • Many modern MikroTik devices support VXLAN hardware offloading, improving throughput and reducing CPU load.

1. Overlay Encapsulation Overhead:
   • VXLAN encapsulates Ethernet frames inside UDP, which adds header overhead.
   • Requires correct MTU planning to avoid fragmentation.
2. Complexity:
   • Requires understanding of overlay (VXLAN) and underlay (IP routing) interactions.
   • Operational design can be more complex when integrating gateways, controllers, or multi-site fabrics.
3. Vendor Interoperability Nuances:
   • VXLAN is widely adopted, but implementation differences can create integration challenges in mixed-vendor environments.

1. Transparent Layer 2 Extension:
   • Provides seamless Layer 2 connectivity over MPLS, simplifying VLAN extension across dispersed sites.
   • Useful for applications that require Layer 2 adjacency.
2. Point-to-Multipoint Support:
   • Natively supports point-to-multipoint services, which aligns well with carrier Ethernet service models.
3. Lower Overhead:
   • Less encapsulation overhead than VXLAN in many deployments, conserving bandwidth.
4. Mature and Well-Understood:
   • Long-standing service provider technology with mature operational practices and strong MPLS ecosystem support.

1. Scalability Limitations:
   • Often constrained by VLAN ID space (4096 VLANs), limiting applicability for large multi-tenant designs.
2. Layer 2 Broadcast Traffic:
   • Can generate significant broadcast/unknown-unicast traffic, which may reduce efficiency at scale.
3. Dependency on MPLS:
   • Requires an MPLS-capable underlay; not always available or desired in every network.
4. Operational Complexity:
   • Operating and troubleshooting MPLS/VPLS typically requires specialized knowledge and disciplined design.

In RouterOS 7, MikroTik has significantly improved VXLAN support, making it a strong contender for modern designs. VXLAN’s Layer 3 underlay, flexibility, and alignment with virtualization/cloud architectures often gives it an edge in data center and multi-site IP fabrics. VPLS remains a solid choice for service provider networks where MPLS is already in place and traditional Layer 2 extension is the objective.

• Large-scale, multi-tenant environments
• Modern data centers with virtualized workloads
• Networks needing efficient Layer 2 extension over a routed (IPv4/IPv6) underlay

• Carrier-grade Ethernet services
• Straightforward Layer 2 extension requirements
• Networks with existing MPLS infrastructure and operational maturity