Generic Routing Encapsulation (GRE) provides a mechanism to encapsulate packets of a protocol into packets of another protocol. This allows packets to be transmitted over heterogeneous networks. A channel for transmitting heterogeneous packets is called a tunnel.
In Figure 1, the enterprise headquarters and branch use Ethernet networks and are connected by an IP/MPLS backbone network. Ethernet over GRE can be deployed to transparently transmit Ethernet packets over a GRE tunnel, enabling Layer 2 communication between the enterprise headquarters and branch.
Ethernet over GRE encapsulates Ethernet packets using GRE and transmits the encapsulated packets over a network running another network layer protocol, such as IPv4. The detailed working process is as follows:
As a Layer 2 tunnel, Ethernet over GRE can only forward unicast and broadcast packets of a specified VLAN but not multicast packets.