network virtualization

What is network virtualization?

Network virtualization is a method of combining the available resources in a network to consolidate multiple physical networks, divide a network into segments or create software networks between virtual machines (VMs). IT managers that use network virtualization can administrate their environment as a single software-based network.

Network virtualization is intended to optimize network speed, reliability, flexibility, scalability and security. It is said to be especially useful in networks that experience sudden, large and unforeseen surges in usage.

Network virtualization works by combining the available resources in a network and splitting up the available bandwidth into channels, each of which is independent from the others and each of which can be assigned (or reassigned) to a particular server or device in real time. Each channel is independently secured. Every subscriber has shared access to all the resources on the network from a single computer.

Network virtualization is intended to improve productivity, efficiency and job satisfaction of the administrator by performing many of these tasks automatically, thereby disguising the true complexity of the network.

Files, images, programs and folders can be centrally managed from a single physical site. Storage media such as hard drives and tape drives can be easily added or reassigned. Storage space can be shared or reallocated among the servers.

Network virtualization types

Virtual networks exist in two forms: internal and external. Both terms refer to inside or outside the server.

Eternal virtualization will use tools such as switches, adapters or a network to combine one or more networks into virtual units.

Internal virtualization refers to using network-like functionality in software containers on a single network server. Internal software allows VMs to exchange data on a host without using an external network.

Advantages and disadvantages

The use of network virtualization does have its upsides and downsides, including:


  • More productive IT environments (i.e., efficient scaling).
  • Improved security and recovery times.
  • Faster in application delivery.
  • More efficient networks.
  • Reduced overall costs.


  • Increased upfront costs (investing in virtualization software).
  • Need to license software.
  • There may be a learning curve if IT managers are not experienced.
  • Not every application and server will work in a virtualized environment.
  • Availability can be an issue if an organization can’t connect to their virtualized data.

SDN vs. network virtualization

Network virtualization shares common elements with software-defined networking (SDN) which can create confusion for some. For example, both share the goal of improving the agility of network resources to VMs and consolidating or segmenting networks.

However, SDNs focus on the separation of control and data plane as well as programmability to improve network configurations, performance and monitoring. SDNs do this by centralizing a network through separating the forwarding process of network packets from routing processes. SDNs disassociate the control and data planes.

This was last updated in October 2021

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