Overlay networks are becoming more popular for their flexibility and their ability to offer new services. They are built on top of other computer networks, and consist of a set of nodes that are connected via virtual links, each representing a path through many physical links. Overlays were used to improve internet routing through QoS guarantees, and to route data to destinations not specified by an IP address. It can also be incrementally deployed on end hosts without cooperation from ISPs. The research work pursued in this project aims to develop an all policy based and context aware overlay networks. The management includes creation, adaptation and termination of overlays. Creation requires the setup of an overlay routing table in each overlay node along the end-to-end path, a path that must be selected in a way that preserves the required QoS. Adaptation occurs during the life time of the overlay to produce a new behavior that reflects any change in the surrounding environment. The change may be necessary to assist mobility, to accommodate a user requesting to join or leave a session, to deal with the failure of an overlay node, or to control congestion. Adaptation therefore entails dynamic adjustment of overlay routing tables. Termination implies claiming the reserved resources and updating overlay routing tables.

The ultimate goal is to automate overlay management in a dynamic manner that preserves the flexibility and the benefits that overlays provide. The use of policies offers an appropriate flexible and customizable management solution that allows network entities to be configured on the fly. Usually, network administrators define a set of rules to control the behavior of network entities. These rules can be translated into component-specific policies that are stored in a policy repository, and are retrieved and enforced as needed. Policies therefore represent a suitable and efficient means for managing overlays.