Cisco Virtual Machine Fabric Extender (VM-FEX) is a Cisco technology that addresses management and performance concerns in a data center by unifying physical and virtual switch management. The Cisco VM-FEX collapses virtual and physical networking into a single infrastructure. This unified infrastructure enables data center administrators to provision, configure, manage, monitor, and diagnose virtual machine network traffic and bare metal network traffic.

The Cisco VM-FEX significantly reduces the number of network management points, enabling both physical and virtual network traffic to be treated in a consistent policy driven manner.

The VM-FEX software extends Cisco fabric extender technology to the virtual machine with the following capabilities:

• Each virtual machine includes a dedicated interface on the parent switch

• All virtual machine traffic is sent directly to the dedicated interface on the switch

• The software-based switch in the hypervisor is eliminated

Figure 1. Extension of Fabric Extender Technology with Fabric Interconnects Using VM-FEX

See the full article:  Cisco Server Virtualization