As a VMware admin or server admin you may not be familiar with the term switch virtual interface, or SVI. So, let’s go over some more familiar concepts. We know VLANs as a layer 2 construct. We can send frames between two devices or machines on the same VLAN without the use of a router, but when we want to send packets between two things on different VLANs a router becomes necessary. You source will have a default gateway IP (often ending in .1 or .254 – though not necessary) and will send the packet to that IP. That IP is the interface of a router. It will then send the packet out another interface to your destination.
However, with an SVI, you don’t need to have a physical router. The SVI is a virtual layer 3 interface on a switch that can route to other broadcast domains (or VLANs). The default gateway in this case will be the IP of the SVI.
This is used within a Cisco ACI fabric, for example. In this case, if the SVI receives a destination MAC address of a router, it will route the packet. If not, it will bridge, in other words send a frame to a destination within the same VLAN.