The VMware vSphere I/O performance team has published a paper that shows VXLAN performance on vSphere 5.1. Virtual extensible LAN (VXLAN) is a network encapsulation mechanism that enables virtual machines to be deployed on any physical host, regardless of the host’s network configuration.
The paper shows how VXLAN is competitive in terms of performance when compared to a configuration without VXLAN enabled. The paper describes the test results for three experiments: throughput for large and small message sizes, CPU utilization for large and small message sizes, and throughput and CPU utilization for 16 virtual machines with various message sizes. Results show that a virtual machine configured with VXLAN achieved similar networking performance to a virtual machine without VXLAN configured, both in terms of throughput and CPU cost. Additionally, vSphere 5.1 scales well as more virtual machines are added to the VXLAN network. Read the full paper here.