This condition also has been seen as a side-effect of a configuration error between the teaming policy and the required number of VTEPs on a prepared host. For example, a teaming policy of source port ID hashing with four active uplinks requires four VTEPs and an IP pool of four addresses. If the teaming policy is changed directly in vCenter Server which is an unsupported operation with NSX, the NSX VXLAN module creates the VTEPs based on its understanding of the teaming policy. Specifically, it may create only one VTEP and report that additional VTEPs could not be created due to IP address exhaustion.

Note: Creating VTEPs in vCenter Server or changing the teaming policy directly in vCenter Server is unsupported with NSX. The NSX Manager maintains a database of the VTEPs created automatically on each ESXi host. Creating VTEPs manually in vCenter Server bypasses this database process, resulting in unpredictable system behavior, including no accidental deletion checks or associated alarms, no display of the VTEPs in the NSX User Interface (UI), and no automatic clean-up when a host or cluster is unprepared for VXLAN.

This issue may also occur in this example:

User has 3 uplinks per host, 2 hosts, so IP pool needs 6 IP addresses. Previous to this attempt, the user corrected the number of Uplinks in the DVS using vCenter, to 2 per host, so only allocated 5 IP addresses - 4 + 1 spare. But the NSX Manager has no knowledge of this, so goes off the prior config of 3 VTEPs x 2 = 6 IP addresses.

In this scenario:

1. Increase the number of IP address to 6, and then attempt the configuration again. In the vsm.log, you see entries similar to:
   
   VXLAN_VMKNIC_PG_CREATION_FAILED.
   
   
2. Unconfigure VXLAN.
3. Configure VXLAN and this time the correct number of uplinks (2 in this example) will be shown and the configuration should be expected to succeed without error.