VXLAN: Millions or Billions?

Tony Bourke comments at The Data Center Overlords:

I was putting slides together for my upcoming talk and there is some confusion about VXLAN in particular, how many VLANs it provides.

The VXLAN header provides a 24-bit address space called the VNI (VXLAN Network Identifier) to separate out tenant segments, which is 16 million. And that’s the number I see quoted with regards to VXLAN (and NVGRE, which also has a 24-bit identifier). However, take a look at the entire VXLAN packet (from the VXLAN standard… whoa, how did I get so sleepy?):

Tony’s amazing Technicolor Packet Nightmare

The full 802.1Q Ethernet frame can be encapsulated, providing the full 12-bit 4096 VLANs per VXLAN. 16 million multiplied by 4096 is about 68 billion (with a “B”). However, most material discussing VXLAN refers to 16 million.

So is it 16 million or 68 billion?