VXLAN lifts the 4096-segment limit and keeps tenant isolation when a private cloud runs out of VLANs
Short answer
C VXLAN's 24-bit identifier yields about 16 million segments over the existing fabric, ending VLAN exhaustion while preserving tenant isolation.
Question
Key Takeaways
VLANs top out at 4096 IDs because of their 12-bit identifier, and VXLAN's 24-bit identifier is the designed answer to segment exhaustion with isolation intact.
A private cloud platform that must allocate three dedicated segmented tiers per customer is close to exhausting its VLAN pool. VXLAN extends the segment identifier to 24 bits, providing roughly 16 million overlay segments over the existing network while preserving isolation between tenants.
Common mistake: GRE (A) tunnels point-to-point traffic but was not designed to multiply tenant segments, and IPsec (D) encrypts flows without creating any new segment space.
Expert Analysis
Why the Answer Is Correct
The constraint is arithmetic: a VLAN identifier is 12 bits, so a platform can never define more than 4096 segments, and a product that consumes three per customer hits that wall fast. VXLAN encapsulates layer 2 frames in UDP with a 24-bit segment identifier, yielding about 16 million segments that ride over the existing IP fabric. New customers keep getting three dedicated, isolated tiers without re-architecting the underlay, which is precisely what the scenario demands.
Why the Other Options Are Wrong
A, GRE, creates individual tunnels between endpoints and carries no multi-tenant segment identifier, so it cannot scale isolation across thousands of tenants. B, SR-IOV, carves a physical NIC into virtual functions for I/O performance and does nothing about network segment capacity. D, IPsec, provides encryption and authentication for traffic flows but adds no segmentation space at all.
Community Comment Notes
Therealjosh states that VXLAN lets the company keep adding customers without VLAN limits while maintaining tenant isolation. BigM gives the numbers that matter: 4096 VLAN IDs versus 16 million VXLAN segments using MAC-in-UDP encapsulation over existing infrastructure. 54a6b25 repeats the 24-bit versus 12-bit contrast and calls VXLAN ideal for exactly this exhaustion scenario, with the unanimous vote backing C.
Official Reference
https://www.rfc-editor.org/rfc/rfc7348.html
This link opens the official vendor documentation in a new tab.
Community Votes
100% of anonymous learners picked answer C. Votes are pick records left by other test-takers — they are not the verified answer.
Discussion 3 contributions
Compiled from public community threads and reader submissions, lightly edited for clarity. Handles and vote tallies are shown as recorded, and comments reflect the views of individual contributors.
From public community threads 3
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Therealjosh 👍 6By implementing VXLAN, the company can continue adding new customers without being constrained by VLAN limitations. VXLAN provides the required isolation for tenants while allowing for the efficient use of available network resources
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BigM 👍 1 Answered CExplanation: VXLAN (Virtual Extensible LAN) is the best solution when a company is running out of VLANs because: ✔ Expands VLAN capacity: VLANs are limited to 4,096 IDs, while VXLAN supports 16 million segments. ✔ Maintains tenant isolation: Each customer can have dedicated, segmented network tiers while still being isolated. ✔ Works over existing infrastructure: VXLAN uses MAC-in-UDP encapsulation, allowing Layer 2 traffic to be transported over Layer 3 networks.
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54a6b25 👍 1C. VXLAN (Virtual Extensible LAN): VXLAN is a network virtualization technology that extends the VLAN ID space to 24 bits, allowing for 16 million unique network segments, compared to the 4,096 VLAN limit. This is an ideal solution for addressing VLAN exhaustion and maintaining network isolation for tenants in a cloud environment.
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