Microsoft announced a solution to the limits of VLANs in the cloud using a new feature that was codeveloped for Windows Server 2012 Hyper-V and Windows Azure. This new feature was called Hyper-V Network Virtualization (HNV). This is based on a more general concept called Software Defined Networking (SDN).

via Introduction to Hyper-V Network Virtualization (HNV).

SDN and HNV abstract IP address spaces. This is done using two types of address:

• Consumer Address (CA): This is the IP address that the tenant uses in their virtual network. This address is set in the guest OS of the virtual machine as normal; it’s the only address that the tenant is normally aware of.

• Provider Address (PA): This is the address that is assigned to the NIC of the virtual switch network to allow virtual machines to communicate at the physical layer.

As far as I can tell from this article a CA is just a private IP and a PA is simply a MAC address, renamed.  To the cloud user however none of this should matter.  I’m struggling to understand the innovation here.   Some of the networking concepts mentioned later in the article seem to add a lot of complexity to the IP layer.