The VMware NSX transport zone defines the boundaries of which ESXi hosts the VMware NSX logical switches (VXLANs) can be extended across. The ESXi hosts participating within a transport zone need to communicate with each other over a VXLAN Tunnel Endpoint (VTEP) connection. VMware Cloud Providers can configure transport zones in different ways depending on their cloud service model. For example, a public cloud service might leverage a single transport zone across their data center for simplicity, whereas a hosting or private cloud model might leverage a transport zone per tenant to avoid replicating all networks across all hosts within the data center.