IT organizations are continually evaluating software-defined network options to provide greater scalability. Microsoft Hyper-V and VMware vSphere server virtualization products both offer compelling features. Since they are widely used and provide great features in terms of virtual networking and high availability, most of the cloud hosting providers and IT organizations use one of these two products as their back-end network virtualization infrastructure to host customer virtual machines. Both server virtualization vendors have developed necessary software to virtualize physical networking models, which eliminates the need for making changes on the physical network devices, and also addresses the limitations and complexity seen in typical environments using virtual local area networks (VLANs).
Microsoft offers Hyper-V Network Virtualization, sometimes referred to as HNV, which is a networking add-on module introduced in Windows Server 2012. VMware offers NSX, which ships as a standalone product and in-kernel product for vSphere hypervisor. The objective of both products is to virtualize physical network Layer-3 components, reduce both operating and capital expenses, and enable automation, but each vendor's approach for implementing the network virtualization components is completely different.