System Center 2016 Virtual Machine Manager Cookbook(Third Edition)
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New networking features in VMM 2016

VMM 2016 and Windows Server 2016 continue to improve Hyper-V Network-Virtualization (HNV) and helps you move to an efficient SDDC solution. VMM 2016 introduces flexible encapsulation which supports both NVGRE (HNVv1) and new VXLAN (HNVv2) to create overlay networks in which original packets from VMs with its MACs, IPs and other data (Customer Address network) are placed inside an IP packet on the underlying physical network (Provider Address network) for further transportation. VXLAN is the default in VMM 2016 and works in MAC distribution mode. It uses a new Network Controller (NC) as a central management point that communicates with Hyper-V hosts and pushes network policies down to NC host agents running on each host. In short, NC is responsible for the address mapping, and the host agents maintain the mapping database. NC also integrates with Software-Load Balancer (L3 and L4), network layer datacenter firewall and RAS gateways which are also included in Windows Server 2016. Consequently, NC is the heart of SDN in VMM 2016 and should always be considered in a cluster configuration.

Thanks to nested virtualization in Windows Server 2016 (an ability to run Hyper-V server inside a VM), you can evaluate SDN and other scenarios using just one physical machine. The good example of SDN evaluation is available at https://blogs.msdn.microsoft.com/excellentsge/2016/10/06/deploying-sdn-on-one-single-physical-host-using-vmm/.

There is also a new way of deploying converged networking that has been introduced in Windows Server 2016 and VMM 2016 to ease and improve SDN deployment. Switch-Embedded Teaming (SET) allows you to group up to eight identical adapters into one or more software-based virtual adapters. Prior to VMM 2016 you needed to have two different sets of adapters: one to use with traditional teaming and the one to use with RDMA because of its incompatibility with teaming and virtual switch. SET eliminates this limitation and supports RDMA convergence as well as QoS, RSS, VMQ, and both versions of HNV noted earlier. Furthermore, creating a general Hyper-V virtual switch with RDMA NICs would be also supported: