This document discusses the benefits of software-defined networking (SDN) for creating virtual networks in a cloud computing environment. It outlines how SDN allows for shared, standardized infrastructure with virtual networks that provide isolation between different logical environments like development, testing, and production. SDN enables full automation, flexibility, and efficiency compared to traditional dedicated physical networks or VLAN-based virtual networks. The document provides examples of how SDN overlays can be used to implement virtual networks and discusses eBay's implementation of SDN using Nicira NVP controllers with OpenStack.