A network service allocating system for a software defined network (SDN) includes an SDN controller, a plurality of SDN switches, a cloud server, and a local server. The SDN controller includes modules for service managing and path managing. Each SDN switch can receive a packet from a client and send the packet to the SDN controller. The service managing module analyzes the packet to identify type of service required and allocates the network service to the cloud server or to the local server according to the type of service required. The path managing module plans an optimum transmission path and sends the path to the SDN controller. Thereby, the SDN switch can obtain the network service. An SDN controller and a network service allocating method are also provided.