Overlay Network
An overlay network is a computer network which is built on top of another network. Nodes in the overlay could be thought of as being connected by virtual or logical links, all of which corresponds to a path, perhaps through numerous physical links, in the underlying network. For instance, distributed systems such as cloud computing and client- server applications are overlay networks since their nodes run on top of the Internet.
Overlay networks are used in telecommunication as of the availability of digital circuit switching equipments and optical fiber. After that, Telecommunication transport networks and IP networks (that combined make up the broader Internet) are all overlaid with at slightest an optical layer other one is a transport layer and last one is an IP or circuit layers (in the case of the PSTN).
Enterprise private networks were 1st overlaid on telecommunication networks such as frame relay and Asynchronous Transfer Mode packet switching infrastructures but migration from these (now legacy) infrastructures to IP based MPLS networks and virtual private networks started in 2001.
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