Network design for substrate in the overlay

A non-transitory computer readable medium storing specific computer-executable instructions that, when executed by a processor, cause a computer system to perform operations comprising:

• receiving, at a source network virtualization device (NVD), a data packet destined for a cloud service accessible via a virtual IP address in a virtual cloud network (VCN);
• encapsulating, by the source NVD, the data packet with a first encapsulation header to generate a first encapsulated data packet, the first encapsulated data packet being forwarded to a dynamic routing gateway (DRG);
• encapsulating, by the DRG, the first encapsulated data packet with a second encapsulation header to generate a second encapsulated data packet, the second encapsulated data packet being forwarded to destination NVD associated with the cloud service;
• decapsulating, by the destination NVD, the second encapsulated data packet to obtain the first encapsulated data packet;
• and
• communicating, by the destination NVD, the first encapsulated data packet to the cloud service, wherein a virtual network interface card (VNIC) associated with the cloud service decapsulates the first encapsulated data packet to obtain the data packet.

A networking system comprising:

• a processor;
• and
• a memory including instructions that, when executed with the processor, cause the networking system to, at least:
• receive, at a source network virtualization device (NVD), a data packet destined 117 for a cloud service accessible via a virtual IP address in a virtual cloud network (VCN);
• encapsulate, by the source NVD, the data packet with a first encapsulation header to generate a first encapsulated data packet, the first encapsulated data packet being forwarded to a dynamic routing gateway (DRG);
• encapsulate, by the DRG, the first encapsulated data packet with a second encapsulation header to generate a second encapsulated data packet, the second encapsulated data packet being forwarded to destination NVD associated with the cloud service;
• decapsulate, by the destination NVD, the second encapsulated data packet to obtain the first encapsulated data packet;
• and
• communicate, by the destination NVD, the first encapsulated data packet to the cloud service, wherein a virtual network interface card (VNIC) associated with the cloud service decapsulates the first encapsulated data packet to obtain the data packet.
• wherein the source NVD receives the data packet from a compute instance associated with a customer, wherein the compute instance and the source NVD are included in a substrate network and the cloud service provided in the VCN is included in an overlay network.