Server Virtualization vs Network Virtualization: Detailed Comparison

Virtualization technology has penetrated deeper in every dimension of information technology be it computing, storage, memory, and networks. Virtual machines are popularly using hardware virtualization which is managed via a hypervisor. 

Virtualization is used across enterprises to increase operating effectiveness and consolidated number of systems that are running. It saves cost and brings in ease of management. Network virtualization on the other hand decouples the physical network layer.

Today we look more in detail about two most popular technologies of today’s time – server virtualization vs network virtualization, key differences between both, features and use cases. 

What is Server Virtualization? 

Server virtualization is the most popular form of virtualization. Broadly it is referred to as ‘abstraction of computing resources’. It is named as a technique which hides the physical characteristics of computing resources from the way in which end users interact with systems, applications, and other resources. 

It is a software component which allows users to run multiple guest operating systems on a single host computer with those guest OS machines making them believe as if they are running on their dedicated hardware. 

It offers portability of guest machines by removing dependency on underlying hardware, reduction in costs, reduction in administrative overhead of managing multiple physical boxes, servers’ consolidation, testing and training on a click, disaster recovery and better resiliency and much more. 

Types of Server Virtualization


It is a technique which provides VME that completely simulates the underlying hardware. Full-virtualization is a common and economical form of virtualization in which computer services are separated from the physical hardware that supports them. Virtual hardware is utilised to run operating systems and their hosted software. It is different from Para-virtualization and hardware-assisted virtualization, among other virtualization methods, as it completely separate guest operating systems from their hosts.


The technique of para-virtualization (PV) is a computer hardware virtualization method that provides virtual machines with a virtual hardware interface similar to the host hardware’s. By altering the guest operating system (OS), this method aims to improve the VM’s performance.

A guest operating system running in a para-virtualized environment is aware that it is running on top of a hypervisor rather than on physical hardware.

OS-Level Virtualization

An OS-level virtualization technology operates on the OS layer. OS kernels in this virtualization method allow for multiple user-space instances that are isolated from one another. Containers, virtualization engines, or software containers are all terms for these instances. In other words, the operating system is run on one operating system and provides its functionality to multiple partitions.

Some examples of server virtualization products are : VMware, Workstation, Player and ESX server, Xen, Virtual Iron etc.

What is Network Virtualization?

Network virtualization simulates hardware platforms. Virtual machines running applications require network connectivity to other virtual machines and the outside world (WAN / Internet) with security and load balancing features. Virtual servers are decoupled from physical servers with virtualization. 

With network virtualization all network services and configurations required to provision application virtual network (VLANs, VRFs, Firewall rules, load balancer pools, VIPs, IPAM, routing, isolation, multi-tenancy etc.) to be decoupled from physical network and move into software layer of virtualization. 

Physical network decoupling simplifies packet forwarding service from one hypervisor to another. It reproduces L2-L7 network services and all features configuration required to provision application virtual network is provisioned at software virtual switch layer through APIs. 

Types of Network Virtualization

External virtualization

An external virtualization scheme can improve the network efficiency by aggregating multiple local networks into a single “virtual” network.

Internal Virtualization

A single network’s functionality can be replicated using software containers through internal virtualisation.

Comparison: Server Virtualization vs Network Virtualization

The key points of comparison between the two are:

  • Concept: Server virtualization is decoupling of computing resources such as CPU, memory, storage etc from underlying physical hardware. Whereas, Network virtualization is decoupling of networking resources such as switches, routers, firewalls, load balancers etc from underlying physical network hardware.
  • Architecture: In server virtualization, physical server hardware is separated from guest operating systems. On the other hand, in network virtualization, multiple virtual networks are spanned across a single physical network comprising nodes and switches.
  • Segregation: Both Server and network virtualization are fully segregated.
  • Types: The types of server virtualization are – Full, Para and OS level virtualization.While, network virtualization is of two types – Internal and external virtualization.

Below table summarizes the differential points between the two:

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