VXLAN is an acronym for Virtual extensible Local Area Network. A joint venture by a few companies of which Cisco is one of them.VXLAN is yet another overlay solution which provides a solution to facilitate sending Layer-2 traffic over a Layer-3 network.
Also, one major reason for VXLAN [as per me at least] is due to the importance virtualization and cloud computing are gaining over the recent years. To isolate huge number customers in a cloud environment becomes extremely challenging when we have just 4,096 VLANs currently available to us [of which again, some cannot be used].