Hello,
Just to understand your scenario.
here is the topology (assuming)
VM -> ESXi -> TOR switch (here occurs the encapsulation) -> internet -> TOR switch (de-encapsulation occurs) -> ESXi -> VM
From VM to TOR switch is going to be VLAN, TOR switch needs to encapsulate VXLAN and the destination TOR switch de-encapsulates the encapsulation and then we are going to vlan traffic again. The TOR switches are the responsible ones for the encapsulation process.
NSX will provide the overlay inside the DC or as mentioned, you can use the standalone edge and run a L2 VPN. Now, my question is, you are not using overlay inside your DC and why are you planning to overlay over the WAN.
Best Regards.
SG
