Network Abstraction Virtualization SDN VNF

Recent question asked:  What is this network virtualization stuff I keep hearing about?

Figure 1.  Network packets and trains

Network virtualization can apply to multiple areas of networking.  At a high level....

Network Virtualization technically started with VLAN, which stands for virtual LAN, where the broadcast domain was abstracted away from ALL of the physical endpoints in the network.   This made it possible to group computers on a network with some level of logic, it's done in software rather than by changing wires and can be considered an abstraction of the wiring.

There are a couple of different types of Software Defined Networking (SDN), the leading one right now is an "overlay"  in a tunnel over an "underlay" or "provider" network.  It exists as an abstraction of one network on top of another, where the underlay is responsible for fast packet performance (traditional networking) and the overlay is responsible for specific awareness or intelligence of the communicating endpoints.
     The simple example:  If you consider a train the "underlay" network (it moves packets efficiently) then a person riding on the train with their own bag is the "overlay."  The train doesn't have to know where the person is going, just that a portion of their travel is between these two endpoints.  This abstracts the path of the data packets from the logic of how they are connected by placing the traffic in a network tunnel.  Common tunnel types are VxLAN, GRE and NVGRE.  This type is associated with technology like VMware NSX and Microsoft Hyper-V networking.

   There is another SDN type that acts on the flow of packets between their source and destination. This also abstracts the path of the data packets from the logic of how they are connected, but in difference to the concept above, this type of SDN acts on the forwarding plane of network hardware primarily.  This type is associated with technology like OpenFlow.

And there is also another type of network virtualization happening right now, where the "function" or software coding of a network device is built within a software package, like a virtual host or container, that can be run on a standard server.  This is called a Virtual Network Function (VNF) and is closely associated with the advocacy of moving from  hardware to software delivery of services, often called Network Function Virtualization (NFV).
     The simple example:  A router has been historically a device with interfaces that moves packets from one physical or logical interface to another according to a configured pattern.  A VNF router is software (not a device) that runs on a server that moves packets from one software or logical interface to another.  This abstracts away the hardware in favor of software delivery of the capability.  There's a bit of this in the enterprise and a lot starting in the Telecommunications Carrier space.

Again, this is at a high level and hope that it helps.  There are other network abstractions currently in use, but these are the primary ones getting all of the media attention today.