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Definition: NFV

(Network Functions Virtualization) Virtualizing network services in commodity hardware rather than specialized devices. NFV is complementary to software-defined networking (SDN), in which traditional fixed-function routers are replaced with regular servers controlled by software. What makes NFV different is that it deals with the services in the network, not packet forwarding.

The VNF Runs on a Virtual Machine
The virtual network function (VNF) is the NFV service that runs in a virtual machine (VM). For example, dedicated hardware boxes such as CDN appliances, access servers, WAN accelerators and monitors are replaced with VNFs in standard server hardware. See software-defined networking, virtual appliance and virtual router.