Before VXLAN gained mass adoption, vCloud Director relied on vCloud network isolation technology to provide a logical network overlay. This MAC-in-MAC proprietary encapsulation technology is still supported, however, support for this technology is now deprecated. Unlike VXLAN logical networks, VCDNI logical networks are created directly by vCloud Director, which communicates with VMware ESXi™ hosts through the vCloud Agent running in the VMkernel. Therefore, a vCloud Networking and Security upgrade has no impact on VCDNI networks and there is no limitation of using them together with VMware NSX.

Service providers are, however, encouraged to use VXLAN technology because VCDNI is a deprecated technology and is supported only for legacy deployments. The migration steps from VCDNI to VXLAN are out of scope for this document.