Microsoft has developed a new networking solution called "Azure CNI Overlay" to push beyond the scale and performance boundaries of the existing networking solutions in Azure Kubernetes Service (AKS).
Azure Container Networking Interface (CNI) Overlay assigns IP addresses from the user-defined overlay address space instead of using IP addresses from the VNET. It uses the routing of these private address spaces as a native virtual network feature. This means that cluster nodes do not need to perform any extra encapsulation to make the overlay container network work.
