How to create VLANs in Watchguard Firebox XTMv for small office. This should apply to other versions as well.
1. Login to your firebox
2. Click on your device then click on Policy Manager to open.
3. Click on Network from the Menu.
4. Then click on Configuration.
5. Click on VLAN tab, click on Add
7. Label the VLAN, fill in VLAN ID, in this i set mine to 10, set Security Zone to "Trusted". Then input network IP address which is also the gateway of that VLAN. Check mark "Use DHCP Server" and add your starting and ending IP address if desired. Then click ok.
8. Go back to Interface Tab, Double click another interface other than your external and internal interface. In this case it would Interface 2, VLAN option.
9. Label interface accordingly. Choose VLAN as interface type. Make sure you leave "Send and receive tagged traffice for selected VLANs" Unchecked and place a check on "Send and receive untagged traffice for selected VLAN" at the bottom and choose the VLAN you created in VLAN tab. Click Ok.
10. Save configuration to Watchguard.
11. Configure Managed Switch to "Trunk" mode.
12. Configure ESXi or make sure physcial server is connected correctly.
13. You should be able to browse internet.
14. Stay tuned for ESXi Vlan configuration.