From Mellanox:
Virtualized Overlay Networks — Infrastructure as a Service (IaaS) cloud demands that data centers host and serve multiple tenants, each with their own isolated network domain over a shared network infrastructure. To achieve maximum efficiency, data center operators are creating overlay networks that carry traffic from individual Virtual Machines (VMs) in encapsulated formats such as NVGRE and VXLAN over a logical “tunnel,” thereby decoupling the workload’s location from its network address. Overlay Network architecture introduces an additional layer of packet processing at the hypervisor level, adding and removing protocol headers for the encapsulated traffic. The new encapsulation prevents many of the traditional “offloading” capabilities (e.g. checksum, TSO) from being performed at the NIC. ConnectX-3 Pro effectively addresses the increasing demand for an overlay network, enabling superior performance by introducing advanced NVGRE and VXLAN hardware offload.
