In addition to abstracting underlying storage capacities from VMs, as traditional storage models do, software-defined storage abstracts storage capabilities.

With the software-defined storage model, a virtual machine becomes a unit of storage provisioning and can be managed through a flexible policy-based mechanism. The model involves the following vSphere technologies.

VMware vSphere ® Virtual Volumes™ (vVols)
The Virtual Volumes functionality changes the storage management paradigm from managing space inside datastores to managing abstract storage objects handled by storage arrays. With Virtual Volumes, an individual virtual machine, not the datastore, becomes a unit of storage management. And storage hardware gains complete control over virtual disk content, layout, and management.
See Working with VMware vSphere Virtual Volumes.
VMware vSAN
vSAN is a distributed layer of software that runs natively as a part of the hypervisor. vSAN aggregates local or direct-attached capacity devices of an ESXi host cluster and creates a single storage pool shared across all hosts in the vSAN cluster.
See Administering VMware vSAN.
Storage Policy Based Management
Storage Policy Based Management (SPBM) is a framework that provides a single control panel across various data services and storage solutions, including vSAN and Virtual Volumes. Using storage policies, the framework aligns application demands of your virtual machines with capabilities provided by storage entities.
See Storage Policy Based Management.
I/O Filters
I/O filters are software components that can be installed on ESXi hosts and can offer additional data services to virtual machines. Depending on implementation, the services might include replication, encryption, caching, and so on.
See Filtering Virtual Machine I/O.