When VXLAN came out a year ago, a lot of us looked at the packet format and wondered why Cisco and VMware decided to use UDP instead of more commonly used GRE. One explanation was evident: UDP port numbers give you more entropy that you can use in 5-tuple-based load balancing. The other explanation looked even more promising: VXLAN and OTV use very similar packet format, so the hardware already doing OTV encapsulation (Nexus 7000) could be used to do VXLAN termination. Boy have we been suckered.
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