Explanation

There are two types of hypervisors: type 1 and type 2 hypervisor.
In type 1 hypervisor (or native hypervisor), the hypervisor is installed directly on the physical server. Then instances of an operating system (OS) are installed on the hypervisor. Type 1 hypervisor has direct access to the hardware resources. Therefore they are more efficient than hosted architectures. Some examples of type 1 hypervisor are VMware vSphere/ESXi, Oracle VM Server, KVM and Microsoft Hyper-V.
In contrast to type 1 hypervisor, a type 2 hypervisor (or hosted hypervisor) runs on top of an operating system and not the physical hardware directly. A big advantage of Type 2 hypervisors is that management console software is not required. Examples of type 2 hypervisor are VMware Workstation (which can run on Windows, Mac and Linux) or Microsoft Virtual PC (only runs on Windows).

Explanation
Cisco SD-WAN uses Overlay Management Protocol (OMP) which manages the overlay network. OMP runs between the vSmart controllers and WAN Edge routers (and among vSmarts themselves) where control plane information, such as the routing, policy, and management information, is exchanged over a secure connection.