Cisco SD-WAN architecture divides the network environment into two distinct parts: the underlay transport network and the overlay fabric of IPsec tunnels.
The underlay network represents the hardware infrastructure - all network devices and interfaces that connect to service providers and forward traffic over the WAN using traditional routing and switching mechanisms. In Cisco SD-WAN, the network ports that connect to the WAN are always placed in VPN 0 (the Transport VPN). These interfaces act as tunnel endpoints for the overlay fabric and are called Transport Locators (TLOCs). TLOCs play a vital role in abstracting the underlay network away from the applications and services running on top. The primary function of the underlay network is to provide IP reachability between TLOCs and connectivity to the SD-WAN controllers.
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