Overlay Networks, Software-Defined Networks, SD-WAN, and Mesh VPN: Understanding the Similarities and Differences

Posted by
March 17, 2023

In the world of networking, there are several terms that often get used interchangeably, causing confusion for professionals and casual users alike. Four such terms are "overlay network," "software-defined network," "SD-WAN," and "mesh VPN." While these concepts share similarities and are sometimes used to achieve similar goals, they have subtle differences that are important to understand. In this article, we'll define each term, discuss the areas in which they overlap, and highlight the distinctions that set them apart. By the end, you should be able to confidently use these terms correctly and appreciate the nuances that differentiate them.

Overlay Network

An overlay network is a virtual network that is built on top of an existing physical network infrastructure. It allows for the creation of logical connections between nodes in the network, regardless of their underlying physical connectivity. Overlay networks can be used to support various applications, such as virtual private networks (VPNs), peer-to-peer networks, and content delivery networks.

Some advantages of overlay networks include:

  • Improved security through the use of encryption and authentication
  • Simplified network management by abstracting away the complexity of the underlying physical network
  • Enhanced flexibility, as overlay networks can be created and modified easily without the need to reconfigure physical connections

Software-Defined Networking (SDN)

Software-defined networking (SDN) is a paradigm shift in network architecture that decouples the control plane (responsible for making decisions about how to route traffic) from the data plane (responsible for forwarding traffic). This separation allows network administrators to centrally manage and control the network's behavior using software applications.

SDN offers several benefits, including:

  • Centralized control and management of the network, leading to simplified administration and reduced complexity
  • Increased flexibility and adaptability, as network administrators can quickly deploy new services and applications without needing to reconfigure individual devices
  • Improved network performance and efficiency, as administrators can optimize traffic flows based on real-time network conditions

SD-WAN (Software-Defined Wide Area Network)

SD-WAN is a specific application of SDN principles to wide area networks (WANs). It is designed to connect geographically dispersed enterprise networks, such as branch offices and data centers, using a centralized control function. SD-WAN simplifies the management of WANs by automating the configuration, monitoring, and management of network devices.

Key benefits of SD-WAN include:

  • Enhanced network performance through the use of intelligent path selection, which dynamically routes traffic based on real-time network conditions
  • Improved security by encrypting data and providing secure connections between remote locations
  • Cost savings, as SD-WAN can leverage a mix of low-cost internet connections and more expensive, dedicated links (such as MPLS)

Mesh VPN

A mesh VPN is a type of overlay network that provides secure and private communication between multiple sites or devices in a distributed network. In a mesh VPN, each node establishes a direct, encrypted connection with every other node, forming a mesh-like topology. This design ensures that data can be transmitted securely, even if some connections fail or are compromised.

Mesh VPNs offer several advantages, including:

  • Enhanced security and privacy through end-to-end encryption and authentication
  • Improved reliability and fault tolerance, as there are multiple paths for data transmission
  • Simplified network management, as new nodes can be added or removed easily without disrupting the entire network

Overlap and Differences

Now that we've defined each term, let's discuss the similarities and differences between them.


Both overlay networks and mesh VPNs involve creating virtual networks on top of existing physical infrastructure. In addition, SD-WAN and mesh VPNs both focus on securely connecting geographically dispersed networks, while SDN and SD-WAN share the principle of centralized control and management of the network using software applications.

All four concepts aim to provide improved security, simplified network management, and enhanced flexibility. Furthermore, these technologies often work together to achieve their respective goals. For example, SD-WAN solutions may utilize overlay networks to create virtual connections between remote sites, while mesh VPNs can be implemented using SDN principles to enable centralized control and management of the VPN connections.

To enumerate:

  1. Abstraction and virtualization: All four technologies share the fundamental concept of abstracting the underlying physical network to enable greater flexibility and simplified management. Overlay networks and mesh VPNs create virtual networks on top of the existing infrastructure, while SDN and SD-WAN separate the control plane from the data plane, enabling centralized network control and management using software applications.
  2. Improved security: Each of these networking concepts focuses on enhancing security in different ways. Overlay networks and mesh VPNs utilize encryption and authentication mechanisms to secure data transmission over the physical network. Similarly, SDN and SD-WAN provide secure network management by centralizing control and allowing administrators to enforce security policies consistently across the entire network.
  3. Simplified network management: A common theme across these technologies is the simplification of network management. Overlay networks abstract the complexities of the physical network, making it easier to create and modify virtual connections. SDN centralizes control and management, reducing the need to configure individual network devices manually. SD-WAN automates configuration, monitoring, and management of WAN devices, while mesh VPNs allow for easy addition or removal of nodes without disrupting the entire network.
  4. Scalability and flexibility: All four concepts enable networks to scale and adapt more easily to changing requirements. Overlay networks and mesh VPNs can be created, modified, or removed without reconfiguring the physical network. SDN and SD-WAN enable rapid deployment of new services and applications without manual device reconfiguration, and they can dynamically adjust to real-time network conditions to optimize performance.
  5. Support for multi-cloud and hybrid environments: As organizations increasingly adopt multi-cloud and hybrid IT strategies, overlay networks, SDN, SD-WAN, and mesh VPNs provide the necessary tools to seamlessly connect and manage disparate network environments. These technologies enable secure, reliable, and high-performance connectivity between on-premises data centers, public and private cloud platforms, and remote sites or branch offices.
  6. Interoperability: Although these networking concepts have distinct purposes and implementations, they often work in tandem to address complex networking challenges. For example, an SD-WAN solution might utilize overlay networks to establish virtual connections between remote sites, while a mesh VPN could be implemented using SDN principles to centralize control and management of the VPN connections.

Now that we’ve covered the similarities, lets go over some differences:


  1. Scope and application: Overlay networks are a more general concept that can be applied to various networking scenarios, whereas SDN, SD-WAN, and mesh VPNs are more specialized. SDN is a broader architectural change in networking that decouples control and data planes, while SD-WAN focuses specifically on wide area networks. Mesh VPNs, on the other hand, are a specific type of overlay network that emphasizes secure and private communication between nodes in a distributed network.
  2. Topology: Overlay networks and mesh VPNs have different topologies. Overlay networks can have various topologies depending on the application, whereas mesh VPNs always have a mesh-like topology, where each node has a direct, encrypted connection with every other node.
  3. Centralized vs. decentralized control: SDN and SD-WAN both feature centralized control and management of the network. In contrast, mesh VPNs are inherently decentralized, with each node independently managing its connections with other nodes in the network. Overlay networks can be either centralized or decentralized, depending on the specific implementation.
  4. Traffic optimization: SDN and SD-WAN solutions focus on optimizing traffic flows within the network to improve performance and efficiency. In contrast, overlay networks and mesh VPNs prioritize secure and private communication, with traffic optimization being a secondary concern.
  5. Use of physical infrastructure: Overlay networks and mesh VPNs abstract away the complexity of the underlying physical network, while SDN and SD-WAN solutions leverage the physical infrastructure to achieve their goals. For instance, SD-WAN can use a mix of low-cost internet connections and dedicated links to optimize network performance and costs, whereas overlay networks and mesh VPNs rely primarily on the existing physical connections.

In summary, overlay networks, software-defined networks, SD-WAN, and mesh VPNs share several similarities, such as improved security, simplified network management, and enhanced flexibility. However, they differ in scope, topology, control mechanisms, traffic optimization strategies, and the utilization of physical infrastructure.

By understanding these similarities and differences, network professionals and casual users alike can better appreciate the nuances of each concept and use them correctly in various networking scenarios. As technology continues to evolve, these networking solutions will likely become even more integrated, providing organizations with powerful tools for managing complex and geographically dispersed networks.


More posts


A WireGuard® VPN that connects machines securely, wherever they are.
Star us on GitHub
By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.