Windows Server version 1709 released today, October 17, 2017 - and with this release there is a new feature for Software Defined Networking (SDN) named Virtual Network Encryption.
Note: The Windows Server version number 1709 means year 2017, month September, or 09.
Virtual Network Encryption provides the ability for the virtual network traffic to be encrypted between Virtual Machines that communicate with each other within subnets that are marked as "Encryption Enabled."
This feature utilizes Datagram Transport Layer Security (DTLS) on the virtual subnet to encrypt the packets. DTLS provides protection against eavesdropping, tampering and forgery by anyone with access to the physical network.
For more information, see the following topics in the Windows Server technical library.