Network Function Virtualization (NFV) is an emerging network architecture that employs the concept of virtualization and allows the consolidation of many network services on top of an industry standard off-the-shelf server. This decoupling of network functions and services from dedicated and expensive hardware appliances has led the Enterprise and Service Providers to increasingly make use of Virtualized Network Functions (VNFs) to reap the benefits of reduced capital and operational expenses. Total cost of ownership calculations however are typically a function of the attainable network throughput and performance, which in a virtualized system is highly dependent on the overall system architecture. The number of VNFs running on the server, their I/O demands, the performance characterization of the underlying hypervisor scheduler, or the packet path from physical interfaces into the VNFs are examples of how the system architecture can influence overall performance and throughput. This article provides the challenges of deploying VNFs on a virtualized system architecture and analyzes the impact of the architecture on the overall VNF performance under both single-VNF and multi-VNF configurations.