Overlay Networks (e.g., VXLAN, NVGRE, MPLS, GENEVE, and NSH) header encapsulation & decapsulation. Stateless offloads of inner packets and packet headers' re-write, enabling NAT functionality and more. Flexible and programmable parser and match-action tables, which enable hardware offloads for future protocols. SR-IOV technology, providing dedicated adapter resources, guaranteed isolation and protection for virtual machines (VMs) within the server. Network Function Virtualization (NFV), enabling a VM to be used as a virtual appliance. The full datapath operation offloads, hairpin hardware capability and service chaining enables data to be handled by the virtual appliance, with minimum CPU utilization.