The first object that is created within vCloud Director is the External Network. An External Network provides the connection from the cloud to the outside world, allowing inter-Cloud connections and is port group based. Even though this connection is called the external connection, an Internet connection is not actually required; this can be set up to provide a connection to several different internal entities, like ESXi hosts, without an actual route
to the Internet. Since this connection is port group-based, then the port group needs to exist prior to attempting to establish the connection. The port group can be defined on a standard vSwitch, a distributed vSwitch, or on a Nexus 1000V. Organization virtual datacenters can use the external networks to provide Internet connectivity to the organizations and the virtual machines that reside within a vApp, given that the vApp network is configured for that. By creating an external network, vCloud Director is effectively configured to send all external traffic using the port group(s) selected. Should there be multiple external networks created then be sure to separate them by using VLANs. Only someone with the system administrator role within the vCloud can create and man- age external networks.
For further reading, check out my vCloud Director 5.1 Networking Concepts white paper!