Comment 3 for bug 1112884

DNSaaS is an option to keep names consistent, but dnsmasq agent injects it's dhcp-domain with dhclient into resolver config. So a VM can have proper DNS name for outside world, but internally thinks that it is attached to a different domain.

For example, you have configured your domain as example.com and specified your dhcp domain as test.com. A VM named "test-123" would be visible to others as test-123.example.com, but it's resolv.conf would contain:

domain test.com
search test.com