GRE Fundamentals

Imagine you are the network engineer responsible for connecting the headquarters in New York with the branch office in San Francisco.
Your goal is simple: allow the two sites to communicate with each other.

As shown in the diagram, both sites connect to the Internet through two ISP routers.
Traffic between the two networks must travel through the ISP infrastructure.

Figure 1 - Enterprise sites network topology

But there is a problem.

The ISP routers do not know your internal networks and they are not part of your enterprise routing design.
As a result, even though both sites can reach the Internet, the two LANs are not logically connected.

Underlay

To solve this problem, network designs are often described using two layers: the underlay and the overlay.
The underlay is the physical infrastructure that carries packets across the network.

Figure 2 - GRE underlay network

In this example, the underlay is simply the Internet and the ISP routers.

When R1 sends traffic, packets travel through ISP1 and ISP2 before reaching R2.
The underlay transports packets, but it does not create a logical connection between the two sites.

Overlay

The overlay is a logical network built on top of the underlay.