In this blog post I will describe a new feature where NSX-T 3.1 and later supports Inter TEP communication within the same host. Edge TEP IP can be on the same subnet and VLAN as the local hypervisor TEPs. This is beneficial for collapsed cluster topologies where Edge Node VMs are running on vSphere Hosts which are configured for NSX-T, as Transport Nodes. There are a lot of topologies where there is a collapsed Compute & Edge or Management & Edge Clusters where this feature is beneficial.
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