As we're creating a cluster of tens of KVM host nodes we've chosen openvswitch as our virtual network infrastructure.
So we need to make isolated virtual networks between VMs on demand. I've seen some designs which uses VXLAN or GRE tunnels based on a mesh. But that could lead to thousands of tunnels between host nodes.
Basically we need something like Amazon VPC in our infrastructure. Can VXLAN tunnels provide us with such a service? If yes how about the scalability issue?