VMware NSX is a network virtualization solution from VMware to make Data Center network more flexible and agile, the same way VMware has revolutionized the virtualization of x86 servers with its ESXi hypervisor solution. NSX is one of the most important part of VMware's Software Defined Data Center (SDDC) strategy.
One of the use case for VMware NSX is vMotion across a layer 3 IP network by building a layer 2 switched network with VXLAN tunnels between the ESXi hypervisors.
NSX three main components are NXS Manger, NXS Controller, NSX Data planes. In addition to these three main components NSX provides a consumption plane for integration with private and public clouds by using tools like Self Services Portal, vCAC, Openstack or Cloudstack.
The NSX Management plane, which is the NSX Manager, is a single point of configuration, monitoring, and reporting interface to the virtualized network. This Management plane provides REST API to north bound for network orchestrations and automations.
The NSX Control plane provided by the NSX Controller, which is the brain of the virtual networks. The NSX controller decouples the new virtual networks from physical topology, the only requirement to build a new virtual network is a solid IP network. The NXS controller is not in the path of data traffic.
The third NSX components is the Data plane, where packet is moved, it has two components NSX vSwitch and NSX Edge. The NSX vSwitch is where layer two traffic switched and firewalled with virtual Distributed Switch (VDS) or Open Virtual Switch (OVS), it has also the Hypervisor Extension Modules. The Hypervisor Extension Modules can be VXLAN, Firewall (vShiled) or Distributed Logical Router for routing east west traffic. The NSX Edge is a router and a gateway for North bound traffic.
This is an excellent solution to easily virtualize the Data Center network without additional Capex, it is very simple to implement and it doesn't care about the underlying network infrastructure, the only thing I don't like about VMware NSX is not having a consolidate visibility of the virtual and physical network, NSX ignores the physical network, which is very different compare to x86 server. VMware might have solution to have visibility to the physical network, which I don't know about.