Overlay transport virtualization is a Cisco proprietary protocol for relaying layer 2 communications between layer 3 computer networks. Overlay Transport Virtualization (OTV) on the Nexus 7000 is an industry-first technology that significantly simplifies extending Layer 2 applications across distributed data centers. Introduction OTV is a MAC-in-IP method that extends Layer 2 connectivity across a transport network infrastructure. OTV is an IP-based functionality that has been designed from the ground up to provide Layer 2 extension capabilities over any transport infrastructure: Layer 2 based, Layer 3 based, IP switched, label switched, and so on. The purpose of this technology is connecting separated data-center islands over a convenient packet switched network. OTV (Overlay Transport Virtualization ) on NX-OS.