A while ago Greg Ferro wrote a great article describing integration of overlay and physical networks in which he wrote that “an overlay network tunnel has no state in the physical network”, triggering an almost-immediate reaction from Marten Terpstra (of RIPE fame, now @ Plexxi) arguing that the network (at least the first ToR switch) knows the MAC and IP address of hypervisor host and thus has at least some state associated with the tunnel.
Marten is correct from a purely scholastic perspective (using his argument, the network keeps some state about TCP sessions as well), but what really matters is how much state is kept, which device keeps it, how it’s created and how often it changes.
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