Network virtualization provides means for efficient management of network resources by embedding multiple virtual networks (VNs) to share efficiently the same substrate network. Such virtual network embedding (VNE) gives rise to a challenging problem of how to optimize resource allocation to VNs and to guarantee their performance requirements. In this paper, we provide VNE algorithms for efficient management of flexi-grid optical networks. We provide an exact algorithm aiming to minimize the total embedding cost in terms of spectrum cost and computation cost for a single VN request. Then, to achieve scalability, we also develop a heuristic algorithm for the same problem. We apply these two algorithms for a dynamic traffic scenario where many VN requests arrive one-by-one. We first demonstrate by simulations for the case of a six-node network that the heuristic algorithm obtains very close blocking probabilities to exact algorithm (about 0.2% higher). Then, for a network of realistic size (namely, USnet) we demonstrate that the blocking probability of our new heuristic algorithm is about one magnitude lower than a simpler heuristic algorithm, which was a component of an earlier published algorithm.
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