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IP in IP tunnel performance degredation on guest OS running on VMware ESXi 5

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I am migrating an application that forwards packets from one IP in IP (ipv4) tunnel to another tunnel.

 

Running on a standard x86 server, we were able to achieve steady 300Mbps performance.

 

However, running the exact setup as a guest OS, the performance is now down to 30Mbps (90% decrease)

 

I have checked the following:

 

1. Running the latest NIC driver VMXNET3

2. Installing VMware guest tools.

 

 

Has anyone encountered similar issues? Any recommendations?


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