Once you start thinking of Virtualization, the first question comes to your mind is that can we leverage stat multiplexing in virtualization world or not, the way we leverage it in Ethernet world. The answer to this question is yes. But there are some oversubscription scenarios which can imapct the performance of system. Every Virtual Network Function is designed to run in a virtualized environment under the control of a hypervisor. Hypervisor could be of VMware ESXi, Citrix XEN, KVM, etc.). There are various over subscription scenarios which can impact the performance of end to end system in a virtualized environment. The system resource over subscription scenarios in a virtualized environment are totally different from that of a physical environment. The following resources can be oversubscribed in a virtualized environment & drastically reduce the VNF performance: 1. Memory Over subscription If the amount of memory allocated to all the VMs provisioned in a host exceeds that of the available physical memory, then the VM performance can drop significantly, as memory is stored on a disk and then swapped in when needed by a VM. There are various memory over subscription techniques are available by various hypervisors but the questions comes does the same is also supported by the VNF or not. 2. I/O Over subscription The I/O resource cannot be formally oversubscribed as VMs are not allocated I/O bandwidth, but if the expected bandwidth of all the VMs is more than the physical I/O available there will be packet drops. Also QoS performance will be poor if I/O is congested. This also impacts the performance of VNFs. 3. CPU Over subscription The number of vCPUs allocated to VNF provisioned in a system can exceed the total number of physical CPUs/cores available in the system.