The VSM acts as a control plane for the N1KV solution, that is, it is responsible for the vCenter communication, programming, and management of VEMs. Unlike the VEM, which is a code running in the hypervisor, it is actually a VM on an ESXi server. It can also be deployed on a dedicated hardware appliance, such as Nexus 1010. VSMs are typically deployed as high availability (HA) pairs. Have a look at the following diagram for more details:

Please note that we can't have one VSM on hardware appliance Nexus 1110 and the other on the ESXi VSM. Both VSMs should be either on hardware appliance or on ESXi hosts:

• Control plane controls multiple VEMS
• Virtual machine running NX-OS