NSX controller is an advanced distributed state management system that controls virtual networks and overlay transport tunnels.

NSX controller is the central control point for all logical switches within a network and maintains information of all virtual machines, hosts, logical switches, and VXLANs. The controller supports two new logical switch control plane modes, Unicast and Hybrid. These modes decouple NSX from the physical network. VXLANs no longer require the physical network to support multicast in order to handle the Broadcast, Unknown unicast, and Multicast (BUM) traffic within a logical switch. The unicast mode replicates all the BUM traffic locally on the host and requires no physical network configuration. In the hybrid mode, some of the BUM traffic replication is offloaded to the first hop physical switch to achieve better performance.