When attempting to create a Service Mesh (SM) including Network Extension (NE) service in VMware HCX targeting an NSX Security Only prepared cluster, the operation fails with the following error:
"Transport zone does not span all of the hosts in at least one of the compute clusters."
VMware HCX
This behaviour is expected because Network Extension (NE) service relies on NSX overlay networks at the target site to establish connectivity. If the target cluster is configured as Security Only. This means the cluster is configured with only VLAN transport zone, and the required OVERLAY transport zone has not been extended to it.
To resolve this issue, ensure that the target cluster is configured with an NSX Overlay transport zone. The HCX NE service requires overlay network support to establish the Service Mesh successfully. Extend the appropriate overlay transport zone to all hosts within the target cluster to meet this requirement. For detailed NE requirements, please refer to the technical documentation linked below.