Managed switch architectures: software managed switches, hardware managed switches, and heterogeneous managed switches

Some embodiments of the invention provide a a method of processing packets associated with a logical switching element implemented by multiple physical switching elements executing on multiple host computers on which multiple machines execute. At a first physical switching element of a first host computer, the method receives a packet from a first machine associated with the logical switching element. For the packet, the method identifies a logical ingress port of the logical switch that is associated with the packet. For the packet, the method also uses the logical ingress port to identify a logical egress port of the logical switch that is associated with the packet. For the packet, the method also uses the logical egress port to identify a physical egress port of the first host computer to use to send the packet along to a second machine associated with the logical egress port. From the identified physical egress port, the method forwards the packet with an encapsulating header that stores the logical egress port.