A VM network is created on top of a logical network, enabling you to create multiple virtualization networks. Network virtualization and gateway devices are new features in VMM 2012 SP1, which is only available on Windows Server 2012 Hyper-V hosts. The types of VM networks in VMM 2012 SP1 are as follows:
Isolation (network virtualization):
Without the VLAN constraints, isolation enables VM deployment flexibility as the VM keeps its IP address independent of the host it is placed on, removing the necessity of physical IP subnet hierarchies or VLANs.
It allows you to configure numerous virtual network infrastructures (they can even have the same customer IP address (CA)) that are connected to the same physical network. A likely scenario is either a hosting environment, with customers sharing the same physical fabric infrastructure, or an enterprise environment with different teams that have different objectives also sharing the same physical fabric...