A capability is provided for providing transparent cloud computing with a virtualized network infrastructure. A method for enabling use of a resource of a data center as an extension of a customer network includes receiving, at a forwarding element (FE), a packet intended for a virtual machine hosted at an edge domain of the data center, determining a VLAN ID of the VLAN for the customer network in the edge domain, updating the packet to include the VLAN ID of the VLAN for the customer network in the edge domain, and propagating the updated packet from the FE toward virtual machine. The edge domain supports a plurality of VLANs for a respective plurality of customer networks. The packet includes an identifier of the customer network and a MAC address of the virtual machine. The VLAN ID of the VLAN for the customer network in the edge domain is determined using the identifier of the customer network and the MAC address of the virtual machine. The FE may be associated with the edge domain at which the virtual machine is hosted, an edge domain of the data center that is different than the edge domain at which the virtual machine is hosted, or the customer network. Depending on the location of the FE at which the packet is received, additional processing may be provided as needed.