Telecom service providers are adopting a Network Functions Virtualization (NFV) based service delivery model, in response to the unprecedented traffic growth and an increasing customers demand for new high-quality network services. In NFV, telecom network functions are virtualized and run on top of commodity servers. Ensuring network performance equivalent to the legacy non-virtualized system is a determining factor for the success of telecom networks virtualization. Whereas in virtualized systems, achieving carrier-grade network performance such as low latency, high throughput, and high availability to guarantee the quality of experience (QoE) for customer is challenging. In this thesis, we focus on addressing the latency challenge. We investigate the delay overhead of virtualization by comprehensive network performance measurements and analysis in a controlled virtualized environment. With this, a break-down of the latency incurred by the virtualization and the impact of co-locating virtual machines (VMs) of different workloads on the end-to-end latency is provided. We exploit this result to develop an optimization model for placement and provisioning of the virtualized telecom network functions to ensure both the latency and cost-efficiency requirements. To further alleviate the latency challenge, we propose a multipath transport protocol MDTCP, that leverage Explicit Congestion Notification (ECN) to quickly detect and react to an incipient congestion to minimize queuing delays, and achieve high network utilization in telecom datacenters. / HITS, 4707