[jiggawatts]

Cloud networking is basically Magic(tm). The packet headers are a mere formality to keep legacy operating systems happy.

In typical data centres the "network" is really just a handful of Cisco boxes. In the cloud, the network extends to the FPGAs or ASICs in the servers themselves, including the hypervisors.

When a packet leaves a VM, the hypervisor host rewrites it, typically in hardware, and then when the remote hypervisor receives it, the packet is rewritten back to what the destination VM accepts.

This allows thousands of overlapping 10.0.0.0/24 subnets, and "tricks" like direct VM-to-VM traffic that appears to go via a load balancer.

The actual load balancer VMs just "set up" the flow, while instructing the hosts to take over the direct traffic in their stead.

[anandrm]

Ok got it , something in lines of OpenFlow. Is there any documentation/links on this being used by AWS / Azure/ GCP .. I would like to read more on this.

[nijave]

Don't have time to look but if you check Gitlab (the company) infrastructure issue tracker (it's open source) they have some details on how GCP cloud networking works with quotes from GCP support staff.

I guess they're seen high amounts of out-of-order packets and there's some detailed write ups on why that happens with GCP SDN implementation.

[bbss]

Can read about GCP here: https://research.google/pubs/pub48645/