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The SDN term is often used for Network Virtualization technologies such as Multi-Tenancy Virtual Networking.  This version of SDN replaces VLAN technologies with technologies such as Virtual Machine Networking.  Virtual Networks are managed within the software fabric inside the Virtual Computing technologies instead of the networking hardware systems.  This technology for managing networks greatly increases the flexibility and scalability of managing many isolated network subnets within a data center environment.

One market trend for networking technology is to move network functions from purpose-built single-purpose network appliances to commodity hardware systems like standard compute servers.  The complexity of network protocols, policies and other data communications components are managed by network software applications running on generic servers.  This converges networking functions with server functions, reducing cost and reducing the training and staffing requirements for IT staffing.