Requirements to use Network Virtualization

Complete isolation between different virtual networks

Abstraction of IP scheme used in the virtual network from the physical network infrastructure enabling virtual networks to use IP schemes incompatible with the physical network fabric and also enable virtual subnets to span physical locations. Different virtual networks can use the same IP scheme without fear of clashing

Windows Server 2012 R2 adds a built-in gateway which enables the connectivity of virtual networks to other networks using forwarding (if the IP scheme uses in the virtual network is compatible with the physical network), NAT (if IP scheme not compatible) and site-to-site

Purely software-defined removing the need to maintain often complex VLAN configurations and network hardware limitations

Require Hyper-V 2012 or above (2012 R2 preferred)

System Center Virtual Machine Manager 2012 SP1 or above (2012 R2 preferred and requried if 2012 R2 Hyper-V)

Virtual switches on Hyper-V hosts must be created through SCVMM as logical switches

A logical network must be created which is enabled for network virtualization use. This logical network needs to have valid network configuration and IP pool which is used to allocated IP addresses to the Hyper-V hosts that are participating in hosting VMs in virtual networks (the Provider Addresses PA)

Create a VM Network that is configured to use network virtualization and has subnets added to it

Data - The actual communication between hosts which is a feature of Windows

Control - Exchange of policy and routing for the traffic between VMs in a virtual network. This is a combination of SCVMM and Windows Server. Consider if a VM is migrated. All Hyper-V hosts need to be updated to know the VM is now on a different Hyper-V host and traffic to that VM has to be routed accordingly

Management - This is performed by SCVMM