Software defined networks and network functions virtualization both relate to deployment, but are separate entities. Virtualization allows the forward plane and the control plane to exist in conjunction with each other, while software defined networks separate the control plane from the forwarding plane and leverage low-cost devices to accomplish the actual packet forwarding.
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NFV and SDN, very separate concepts. Related in deployment, in certain cases, but certainly very, very separate. SDN is the separation of the control layer and the forwarding layer. The control layer itself could be placed inside a virtual machine somewhere, and that's fine; that's perfectly good. The forwarding layer, more often than not, has to be hardware. I mean, by the very nature of us needing really fast links those usually have to be implemented in some sort of hardware. Though not necessarily; it could be also virtualized and we see that in the case of, say, the VMWares, which is where the Nexus 1000V, where you have pretty much a virtual forwarding layer.
What, essentially, NFV does is, well, it just takes care of virtualizing these things. If I have a virtual router, which doesn't have to be separate. We don't have to have the control plane and the forward plane separate. They can be very much in the same location, so you look at the VIATUS in the world and so on. Those guys are very useful in a virtualized environment. As we begin to go from our data center, virtualizing our data center, having a hybrid cloud deployment, having a public cloud deployment, across all of this deployment scenarios we will end up with complex network architectures. Running VPNs, running VRF, running ... I can't even begin to think of all the different ways that we are going to need to forward packets in these complex topologies. Along the path, we're going to need devices, virtual devices, which do what routers do. That is what NFV helps us achieve. We can extend our network topology into the cloud without having to make compromises, without having to dumb down our services, reduce abstraction, by placing NFV components in there.
Now, SDN, somewhat separate. It allows us to realize cost savings, or operational savings, or efficiency savings, by separating the control plane from the forwarding plane and having people interact in a central location with the entire network provisioning services end to end while leveraging very low-cost, devices to accomplish the actual packet forwarding.