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To accommodate the service paradigm shift driven by the now amazingly wide variety of services, telecom operators must overcome many challenges in redesigning their network infrastructure to attain system flexibility, scalability, and cost effectiveness. A key part of the solution is the recent advent of network virtualization based on commodity hardware. We propose a unique edge-server architecture that combines network virtualization with advanced digital signal processing (DSP) technology. Our architecture has the server’s central processing unit running application layer functions and a general-purpose accelerator running dissimilar physical layer functions, including advanced DSP. To elucidate the power budget capability of our coherent detection scheme, a hardware experiment demonstrates the optical power budget of 45.2 dB for quadrature phase-shift keying signals of 5 Gbit/s bit rate.