At a physical device in a network configured to host a virtual switch and one or more virtual machines, a packet is received at the virtual switch from a source virtual machine that is directly attached to that virtual switch. A destination Media Access Control (MAC) address is identified from the packet indicating a destination virtual machine for the packet. In response to determining that the destination MAC address of the packet is not present in a database of MAC addresses accessible by the virtual switch, the destination MAC address of the packet is replaced with a shared MAC address associated with a plurality of physical switches in the network.