"It is going to be ok…". That's what I usually tell Data Center Network folks when we talk about the future of Data Center networking. And just before they can finish the sigh of relief, I follow it up with "…if you are open to learning the new ways of doing things". One thing we tend to lose track of, as technologist, is that we serve to maximize our employers' revenue. People other than us, like the CTO and CIO who would normally set IT's corporate direction and strategy, determine how that happens. Any opportunity they see that will either 1) increase profit or 2) reduce cost (OPeX) or 3) increase efficiency, they will explore and pursue. After all, that IS their job (otherwise where do you think their big end-of-year bonus will be coming from?)
Once upon a time there was a Line of Business (LoB) called Voice. The members of the Voice LoB handled all that was corporate voice, which at the time included something called a PBX (sp?). Then it came to the attention of the corporate IT's Managing Directors that there was a way to reduce OPeX and increase efficiency by merging the Voice and Network infrastructures. Turns out that those former Voice folks that didn't embrace the concept of TCP/IP ended up out of the "Voice" field all together (or worse, went into management). Those that did embrace change went on to be the first ones to dominate the new field of VoIP.
By the way, some corporations still have a team called Voice, but it is nothing like the old Voice team of yesterdays.
Now it is the Data Center Network engineer that has an opportunity to embrace change (and remain doing networking). To help out with this (a little bit) I would like to provide definitions for three terms that seem to create some confusion among my peers. By understanding these terms, hopefully, you should be able to separate the facts from the fiction (or is it BS?) that the vendors' sales reps throw your way.
Software Defined Network (SDN)
This means a solution (any solution) that centralizes the Control Plane functionality away from the entities running the Data Plane. As a side note, the Management Plane may be handled by a separate entity from the Control Plane. By centralizing the Control Plane you can design a network that more efficiently updates Control Plane information (such as MAC tables) among the entities that perform the vital role of Data Plane forwarders.
A SDN solution may have all physical components to handle the Network Planes, may have all virtual components to handle the Network Planes, or may have virtual components to handle the Data Plane and physical components to handle the rest of the Network Planes. The point is that SDN does not care what the components that handle the Network Planes are, as long as the Control Plane is centralized away from the Data Plane.
Your traditional Network vendors, like Arista, Brocade, and Cisco (the ABC of networking), started off with some form of physical SDN. Your newer network players, like Nuage and VMware, are offering virtual SDN.
Network Virtualization (NV)
This one is easy. Is your Data Plane component virtual? Congratulations, you just did some NV. Until recently, if you had a virtual Data Plane, you also had the other Network planes virtualized. This is changing with some solutions that are trying to marry physical SDN with some virtual SDN. This is mostly being driven by the traditional Network vendors.
If your SDN solution is 100% virtual, then it is NV (I'm looking at you Nuage Networks VSP and NSX). If your SDN is partially virtualized, then I'm not sure what you have unless you tell me some more of what you deployed. Is the Data Plane virtualized? Then you have NV. Is the Data Plane not virtualized? Then, NO YOU DON'T HAVE NV.
Network Function Virtualization (NFV)
Another easy one. You have NV, but you don't have SDN? Then you have NFV. The best way to think of NFV is an entity that owns both the Control and Data Planes, and it is running in a virtual form factor (like a Virtual Appliance). An example of NFV is Brocade's vRouter (formerly Vyatta). By definition, all NFV is NV.