Methods and systems for allocating network resources are provided. According to one embodiment, a VR-based switch is configured for operation at a POP of a service provider. A NOS is provided on each processing element of the switch. Resources of the switch are segmented among multiple subscribers by associating sets of VRs with a first and second subscriber, mapping the sets of VRs onto sets of the processing elements, and configuring a first and second set of customized services, each including two or more of firewalling, virtual private networking, encryption, traffic shaping, routing and NAT, to be provided by the switch on behalf of the first and second subscribers, respectively, by allocating first and second service object groups within sets of VRs. Each service object can be dynamically distributed by the NOS to customized processors of the first or second set of processing elements to achieve desired computational support.