Network functions virtualization (NFV) is a network architecture concept that leverages IT virtualization technologies to virtualize entire classes of network node functions into building blocks that may connect, or chain together, to create and deliver communication services.

NFV relies upon traditional server-virtualization techniques such as those used in enterprise IT. A virtualized network function, or VNF, is implemented within one or more virtual machines or containers running different software and processes, on top of commercial off the shelf (COTS) high-volume servers, switches and storage devices, or even cloud computing infrastructure, instead of having custom hardware appliances for each network function thereby avoiding vendor lock-in.

For example, a virtual session border controller could be deployed to protect a network without the typical cost and complexity of obtaining and installing physical network protection units. Other examples of NFV include virtualized load balancers, firewalls, intrusion detection devices and WAN accelerators to name a few.

The decoupling of the network function software from the customized hardware platform realizes a flexible network architecture that enables agile network management, fast new service roll outs with significant reduction in CAPEX and OPEX.

Product development within the telecommunication industry has traditionally followed rigorous standards for stability, protocol adherence and quality, reflected by the use of the term carrier grade to designate equipment demonstrating this high reliability and performance factor. While this model worked well in the past, it inevitably led to long product cycles, a slow pace of development and reliance on proprietary or specific hardware, e.g., bespoke application-specific integrated circuits (ASICs). This development model resulted in significant delays when rolling out new services, posed complex interoperability challenges and significant increase in CAPEX/OPEX when scaling network systems & infrastructure and enhancing network service capabilities to meet increasing network load and performance demands. Moreover, the rise of significant competition in communication service offerings from agile organizations operating at large scale on the public Internet (such as Google Talk, Skype, Netflix) has spurred service providers to look for innovative ways to disrupt the status quo and increase revenue streams.

In October 2012, a group of telecom operators published a white paper at a conference in Darmstadt, Germany, on software-defined networking (SDN) and OpenFlow. The Call for Action concluding the White Paper led to the creation of the Network Functions Virtualization (NFV) Industry Specification Group (ISG) within the European Telecommunications Standards Institute (ETSI). The ISG was made up of representatives from the telecommunication industry from Europe and beyond. ETSI ISG NFV addresses many aspects, including functional architecture, information model, data model, protocols, APIs, testing, reliability, security, future evolutions, etc.

The ETSI ISG NFV has announced the Release 5 of its specifications since May 2021 aiming to produce new specifications and extend the already published specifications based on new features and enhancements.

Since the publication of the white paper, the group has produced over 100 publications, which have gained wider acceptance in the industry and are being implemented in prominent open source projects like OpenStack, ONAP, Open Source MANO (OSM) to name a few. Due to active cross-liaison activities, the ETSI NFV specifications are also being referenced in other SDOs like 3GPP, IETF, ETSI MEC etc.