Network virtualization

Network virtualization is the ability to create and manage a logical network of compute, storage, or other network resources. The components of a virtual network can be remotely located in the same or different physical networks across different geographical locations. Virtual networks help us create custom address spaces, logical subnets, custom network security groups for configuring restricted access to a group of nodes, custom IP configuration (few applications demand static IPs or IPs within a specific range), domain defined traffic routing, and so on.

Most of the LOB applications demand logical separation between business components for enhanced security, isolation, and scalability needs. Network virtualization helps build the isolation configuring subnet level security policies, restrict access to logical subnets or nodes using access control list (ACL), and restrict inbound/outbound traffic using custom routing without running a physical network. Public cloud vendors provide network virtualization on pay per use basis for small to medium scale business who cannot afford running a private IT infrastructure. For example, Microsoft Azure allows you to create a virtual network with network security boundaries, secure VPN tunnel to connect to your personal laptops, or on-premise infrastructure, high bandwidth private channels, and so on using pay-per-use pricing. You can run your applications on cloud with tight security among nodes using logical separation without even investing on any network devices.