Many people are asking these again and again. I have found this information really helpful.
How is network virtualization similar to server virtualization? Well, for one thing they’re very similar conceptually. On a virtualized server, a software abstraction layer (server hypervisor) reproduces the familiar attributes of the physical server in software, allowing the attributes to be programmatically assembled in any arbitrary combination to produce a unique virtual machine (VM) in a matter of seconds. With network virtualization, the functional equivalent of a network hypervisor reproduces networking services—like switching, routing, access control, firewalling, quality of service (QoS), and load balancing—in software, allowing them to produce a unique virtual network in a matter of seconds.
Network virtualization also provides similar benefits to server virtualization: just as virtual machines operate independently of the underlying hardware and allow IT to treat physical hosts as a pool of compute capacity, virtual networks operate independently of their underlying IP network hardware, so IT can treat the physical network as a pool of transport capacity that can be consumed and re-purposed on demand. When you think about it, what’s going on in networking today is the same thing that has been going on in compute and storage for years. Just as server virtualization opened up new opportunities for organizations to store and access information with greater reach and speed than ever before, network virtualization resolves the networking challenges that have kept today’s organizations from realizing their datacenters’ full potential—until now. More importantly, network virtualization provides a strong foundation for resolving the networking challenges that are keeping today’s organizations from realizing the full potential of the software-defined datacenter (SDDC).