Why VXLAN is gaining traction

The push to modernize Ethernet has come up with number of approaches, the most well-known of which is Virtual eXtensible Local Area Network (VXLAN), a framework for overlaying virtualized Layer 2 networks over Layer 3 networks.

(For more detail than I can handle on VXLAN, see this paper from the Internet Engineering Task Force)
 VMware is one of a number of companies backing VXLAN, arguing on this page that it offers flexibility through supporting so-called stretched clusters that cross switching and pod boundaries; streamlined network operations by running on Layer 3 networks; and cost savings by running over standard switching hardware.
At the conference WAN optimization appliance maker Riverbed and VMware said they are collaborating on a new VXLAN-aware Internet Protocol Flow Information Export (IPFIX) format, which would enable network and application performance monitoring, troubleshooting, and reporting.

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