Comprehensive and Detailed 250 to 350 words of Explanation From VMware Cloud Foundation (VCF) documents:

This scenario describes a classic "Overlapping IP" or "Fenced Network" challenge in a private cloud environment. In many development or lab use cases, users need to deploy identical environments where the internal IP addresses (e.g., 192.168.1.10) are the same across different instances to ensure application consistency.

To allow these identical environments to access the public internet simultaneously without causing an IP conflict on the external physical network,Source Network Address Translation (SNAT)is required. According to VCF and NSX design best practices, theTier-0 Gatewayis the most appropriate place for this translation when multiple tenants or labs need to share a common pool of external/public IP addresses.

When a VM in Lab A sends traffic to the internet, the Tier-0 Gateway intercepts the packet and replaces the internal source IP with a unique public IP (or a shared public IP with different source ports). When Lab B (which uses the same internal IP) sends traffic, the Tier-0 Gateway translates it to adifferentunique public IP (or the same shared public IP with different ports). This ensures that return traffic from the internet can be correctly routed back to the specific lab instance that initiated the request.

Option A (DNAT) is used for inbound traffic (allowing the internet to reach the lab), which doesn't solve the outbound connectivity requirement for overlapping IPs. Option B (Isolation) would prevent communication entirely. Option C (Firewall) controls access but does not solve the routing conflict caused by identical IP addresses. Thus,SNAT rules on the Tier-0 gatewayare the verified solution for providing internet access to overlapping lab environments.

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