In his recent blog post Joe Onisick wrote “What network virtualization doesn’t provide, in any form, is a change to the model we use to deploy networks and support applications. [...] All of the same broken or misused methodologies are carried forward. [...] Faithful replication of today’s networking challenges as virtual machines with encapsulation tunnels doesn’t move the bar for deploying applications.”
Much as I agree with him, we can’t change much on planet Earth due to the fact that VMs use Ethernet NICs (so we need some form of VLANs to cater to infinite creativity of some people), IP addresses (so we need L3 forwarding), broken TCP stack (requiring load balancers to fix it), and obviously can’t be relied upon to be sufficiently protected (so we need external firewalls). Furthermore, unless we manage to stop shifting the problems around, the networking as a whole won’t get simpler.
What overlay network virtualization does bring us is a decoupling that makes physical infrastructure less complex so it can focus on packet forwarding instead of zillions of customer-specific features preferably baked in custom ASICs. Obviously that’s not a good thing for everyone out there.
It could also be that the company Joe is currently working for has some truly revolutionary ideas (or so their web page claims), and I would love to be proven wrong, but the first glimpses weren’t exactly encouraging.