Network function virtualization (NFV) and software-defined networking (SDN) represent new paradigms in networking. In this paper, we extend the concept of NFV to include the functions associated to the physical objects of Internet of Things and name it as network and physical functions virtualization (N&PV). We propose a novel path computing framework under QoX constraints based on such N&PV functions embedding and the paths algebra. This novel framework is assessed by means of three use cases and its potential and flexibility are demonstrated.