Assignment of unique physical network addresses for logical network addresses

A method of forwarding a packet associated with a logical network implemented over a physical network, the packet having a logical destination network address, the method comprising:

• when the logical destination network address is associated with a single physical network address in the physical network, (i) replacing logical network addresses in the packet, including the logical destination network address, with corresponding physical network addresses and (ii) forwarding the packet with the physical network addresses through the physical network;
• when the logical destination network address is not associated with a single physical network address in the physical network, encapsulating the packet with an encapsulation header that identifies a physical network destination of the packet and forwarding the encapsulated packet through the physical network.

A non-transitory machine readable medium storing a program which when executed by at least processing unit forwards a packet associated with a logical network implemented over a physical network, the packet having a logical destination network address, the program comprising sets of instructions for:

• when the logical destination network address is associated with a single physical network address in the physical network, (i) replacing logical network addresses in the packet, including the logical destination network address, with corresponding physical network addresses and (ii) forwarding the packet with the physical network addresses through the physical network;
• when the logical destination network address is not associated with a single physical network address in the physical network, encapsulating the packet with an encapsulation header that identifies a physical network destination of the packet and forwarding the encapsulated packet through the physical network.