This document discusses Mellanox's ConnectX-3 Pro networking adapter, which provides hardware offloading for overlay networks like VXLAN and NVGRE. This dramatically lowers CPU overhead, allowing more virtual machines to be supported per server. Test results show that with hardware offloading, VXLAN throughput is higher and CPU utilization is lower compared to software-only implementations. Offloading also reduces capital and operating expenses through increased server utilization and efficiency.