Adapters that provide a high degree of traffic isolation in hardware, allowing true fabric convergence without compromising service quality and without taking additional CPU cycles for the I/O processing. The solutions provide end-to-end traffic and congestion isolation for fabric partitions and granular control of allocated fabric resources. Every adapter can provide thousands of I/O channels (Queues) and more than a hundred virtual PCI (SR-IOV) devices, which can be assigned dynamically to form virtual NICs and virtual storage HBAs. The channels and virtualized I/O can be controlled by an advanced multi-stage scheduler, controlling the bandwidth and priority per virtual NIC/HBA or group of virtual I/O adapters. This ensures that traffic streams are isolated and that traffic is allocated and prioritized according to application and business needs.