Software-gateway layer 2 bridging bridges a VXLAN logical switch to a VLAN-backed dvPortGroup (vSphere Distributed Switch Port Group). An NSX DLR and DLR control VM is required for software-based layer 2 bridging to work, but the routing function of DLR is not mandatory. A bridging instance will be created and active on an ESXi host, that is hosting the active DLR control VM. The VLAN-backed dvPortGroup must reside on the same vDS as the VXLAN transport network; this means the VLAN needs to be spanned up to the ESXi host, hosting the DLR control VM.
In a large-scale multi-rack deployment, it may not be acceptable or possible to extend VLANs between racks, as shown in the following diagram:
One way ...
