There are two major categories of network virtualization commonly seen in cloud computing today:
. Virtual Local Area Networks (VLANs): VLANs leverage existing network technology implemented in most network hardware.
VLANs are extremely common in enterprise networks, even without Management Storage Service Management plane to nodes storage nodes (volumes) to compute nodes (instances) Internet to compute nodes Instances to instance Common networks underlying IaaS. They are designed for use in single-tenant networks (enterprise data centers) to separate different business units, functions, etc. (like guest networks). VLANs are not designed for cloud-scale virtualization or security and shouldn't be considered, on their own, an effective security control for isolating networks. They are also never a substitute for physical network segregation.
. Software Defined Networking(SDN): A more complete abstraction layer on top of networking hardware, SDNs decouple the network control plane from the data. This allows us to abstract networking from the traditional limitations of a LAN.
Ref: CSA Security Guidelines V.4 (reproduced here for the educational purpose)

Transfer of cost of ownership is the key benefit of IaaS model.

Following are the characteristics of IaaS service model of cloud computing:
1. Scale
2. Converged network and IT capacity pool
3. Self-service and on-demand capacity
4. High reliability and resilience