Popular online services such as social networks, e-commerce and bidding are routinely hosted in large-scale data centers. Group communication systems (e.g., multicast) and distributed key-value stores are among some of the most essential building blocks for these services. Due to their scaling requirements, overlay networks such as distributed hash tables (DHTs) have been traditionally used in such systems. Modern hierarchical datacenter networks and global services running across datacenters pose unique challenges that traditional systems are ill-equipped to handle. For instance, the inherent multi-rooted tree topology design with oversubscription at the core translates into lesser bandwidth at the upper levels of the trees; traditional systems do not take this into consideration leading to a wastage of precious network resources. To solve this problem, we introduce a hierarchy-aware distributed overlay framework called DC2, for large scale and highly dynamic services. We build two applications—DC2-Multicast and DC2-Store—on top of DC2. In our experiments using a real prototype deployed over 700 nodes running over a Modelnet topology with 2 datacenters, we found that DC2-Multicast minimizes message latencies by several orders of magnitude, and reduces node and link stress by a factor of 2 to 3. We also find a reduction in object lookup latency by a factor of 8.