Virtual IP, also called a circuitless or loopback interface, is a powerful function that provides a way to assign one or more addresses to the system without the need of binding the address to a physical interface.
You can use this function when you want to run multiple occurrences of a system bound to different addresses, or if you want to run other services that need to bind to default ports. Most environments where you might want to use virtual IP are cases where you want to provide multiple paths between the local gateway and the System i™ platform; for example, load balancing and fault tolerance. In this context, each path implies an additional interface, and consequently, an additional, nonvirtual IP address on the system. The existence of these multiple interfaces should only be visible on the local network. You do not want the remote clients to be aware of the multiple IP addresses for the system. Ideally, you want them to view your system as a single IP address. How the inbound packet gets routed through the gateway, over the local network, and to the system should be invisible to a remote client. The way to accomplish this is by using virtual IP. Local clients should communicate with the system by any of the physical IP addresses while remote clients see only the virtual IP interface.
The virtual IP environment is for the system that acts as the server for remotely connected clients. More importantly, the virtual IP address is on a different subnet than the physical interfaces. Moreover, the virtual IP address makes your system appear as a single host, not necessarily as one attached to a larger network or subnetwork. Therefore, the subnet mask for the virtual IP interface should usually be set to 255.255.255.255.
Because the virtual IP address is not bound to a single physical interface, the system never responds to an Address Resolution Protocol (ARP) request to the virtual IP address unless you enable proxy ARP for the virtual IP address. In other words, by enabling proxy ARP, a local interface can respond to the ARP requests on behalf of the virtual IP address. Otherwise, remote systems must have a route defined to reach the address.
In the preceding example, the workstations all point to one of the 10.3.2 interfaces on the system as their next hop gateway. When a packet arrives at the system, it goes through the packet processing. If the destination address matches any address defined on the system (including virtual IP addresses), the system processes the packet.
The Domain Name System (DNS) servers use the addresses of the requested system. In this case, all the addresses represent the same system. You can use the virtual IP function when consolidating multiple systems into one larger system.