Explanation
Fabric overlay concepts are related to the creation of a virtual network topology on top of a physical network infrastructure. The overlay network is usually designed to provide services or features that are not directly supported by the underlay network, such as network segmentation, mobility, or security. Some of the fabric overlay concepts are:
An overlay is a logical topology: An overlay network is a network that is built on top of another network using software or hardware devices that encapsulate and decapsulate packets. The overlay network creates a logical topology that is independent of the physical topology of the underlay network. The overlay network can span multiple Layer 2 or Layer 3 domains and provide end-to-end connectivity for the overlay endpoints. An example of an overlay network is a VPN that connects remote sites over the Internet.
GRE is a type of overlay: Generic Routing Encapsulation (GRE) is a protocol that encapsulates packets of one protocol type within another protocol type. GRE is used to create tunnels between devices that can carry different types of traffic, such as IP, IPv6, MPLS, or Ethernet. GRE is a type of overlay network that can be used to extend Layer 2 or Layer 3 connectivity across different networks or to provide a secure and private communication channel. An example of a GRE overlay network is a DMVPN that uses GRE tunnels to connect branch offices to a central hub over the Internet.
An overlay uses alternate forwarding attributes: An overlay network uses different attributes or identifiers to forward packets than the underlay network. The overlay network adds specific headers or tags to the packets that contain information about the overlay endpoints, such as their logical addresses, group memberships, or policies. The overlay devices use these attributes to forward packets based on the overlay topology and services, rather than the underlay topology and protocols. The underlay devices are unaware of the overlay attributes and forward packets based on the underlay headers. An example of an overlay network that uses alternate forwarding attributes is a VXLAN network that uses VNIs to segment traffic and provide Layer 2 connectivity over a Layer 3 network.
The other options, Intermediate System to Intermediate System (IS-IS), a virtual Local Area Network (VLAN), and a link state routing protocol like OSPF, are not fabric overlay concepts. IS-IS and OSPF are routing protocols that are used to exchange routing information and build the routing table of the underlay network. A VLAN is a Layer 2 segmentation technique that divides a physical network into logical subnets based on the switch port membership. A VLAN is not an overlay network, but it can be part of the underlay network or the overlay network, depending on the design. References := : Fabric Technologies and Overlays - Cisco Learning Network1, What Is a Network Fabric? - Cisco2