Each host transport node is a tunnel endpoint. Each tunnel endpoint has an IP address. These IP addresses can be in the same subnet or in different subnets, depending on your configuration of IP pools or DHCP for your transport nodes.

When two VMs on different hosts communicate directly, unicast-encapsulated traffic is exchanged between the two tunnel endpoint IP addresses associated with the two hypervisors without any need for flooding.

However, as with any Layer 2 network, sometimes traffic that is originated by a VM needs to be flooded, meaning that it needs to be sent to all of the other VMs belonging to the same logical switch. This is the case with Layer 2 broadcast, unknown unicast, and multicast traffic (BUM traffic). Recall that a single NSX logical switch can span multiple hypervisors. BUM traffic originated by a VM on a given hypervisor needs to be replicated to remote hypervisors that host other VMs that are connected to the same logical switch. To enable this flooding, NSX supports two different replication modes:

• Hierarchical two-tier (sometimes called MTEP)

• Head (sometimes called source)

Hierarchical two-tier replication mode is illustrated by the following example. Say you have Host A, which has VMs connected to virtual network identifiers (VNIs) 5000, 5001, and 5002. Think of VNIs as being similar to VLANs, but each logical switch has a single VNI associated with it. For this reason, sometimes the terms VNI and logical switch are used interchangeably. When we say a host is on a VNI, we mean that it has VMs that are connected to a logical switch with that VNI.

A tunnel endpoint table shows the host-VNI connections. Host A examines the tunnel endpoint table for VNI 5000 and determines the tunnel endpoint IP addresses for other hosts on VNI 5000.

Some of these VNI connections will be on the same IP subnet, also called an IP segment, as the tunnel endpoint on Host A. For each of these, Host A creates a separate copy of every BUM frame and sends the copy directly to each host.

Other hosts’ tunnel endpoints are on different subnets or IP segments. For each segment where there is more than one tunnel endpoint, Host A nominates one of these endpoints to be the replicator.

The replicator receives from Host A one copy of each BUM frame for VNI 5000. This copy is flagged as Replicate locally in the encapsulation header. Host A does not send copies to the other hosts in the same IP segment as the replicator. It becomes the responsibility of the replicator to create a copy of the BUM frame for each host it knows about that is on VNI 5000 and in the same IP segment as that replicator host.

The process is replicated for VNI 5001 and 5002. The list of tunnel endpoints and the resulting replicators might be different for different VNIs.

With head replication also known as headend replication, there are no replicators. Host A simply creates a copy of each BUM frame for each tunnel endpoint it knows about on VNI 5000 and sends it.

If all the host tunnel endpoints are on the same subnet, the choice of replication mode does not make any difference because the behaviour will not differ. If the host tunnel endpoints are on different subnets, hierarchical two-tier replication helps distribute the load among multiple hosts. Hierarchical two-tier is the default mode.