Description of problem:

Layer 2 gateway services allow a tenant’s virtual network to be bridged to a physical network. This integration provides users with the capability to access resources on a physical server via a layer 2 network connection rather than via a routed layer 3 connection, i.e extending the L2 broadcast domain instead of going through L3/Floating IP.

To implement this, there is a need to bridge between the virtual workloads running inside an overlay (VXLAN) and workloads running in physical networks (normally using VLAN).

The idea behind hardware VTEPs is to create an overlay network that connects VMs and physical servers and make them think that they’re in the same L2 network even if they’re on opposite sides of the globe. OpenDaylight will manipulate specific OVSDB databases on the VTEP. The database that the controller manipulates will vary depending on the VTEP’s type: if the VTEP is a hypervisor, the controller will expect to manipulate an Open_vSwitch database. If the VTEP is a hardware VTEP, it will expect to manipulate a hardware_vtep database. In both cases, the controller will manipulate the DB using the OVSDB protocol.

Neutron has an L2 GW API: http://docs.openstack.org/developer/networking-l2gw/usage.html