VPC vs. VPN: What Are They, and How Do They Work Together?

A VPC (virtual private cloud) and a VPN (virtual private network) have similar elements, including data protection, a private network environment, customized security, and traffic isolation over public connections. Although the two complement each other, they perform separate tasks. 

Find out what each does, how they differ, and what benefits they offer when used together. 

VPN vs. VPC: The Differences at a Glance

VPNs and VPCs both deal with privacy, but they protect it in very different places:

• A VPN is cybersecurity software that encrypts your online traffic to keep your online activities, like your work, private from anyone that might monitor or snoop your data in transit. 
• A VPC is a cloud feature that lets you build an isolated private network within a cloud provider’s infrastructure to keep a company’s apps and data secure.

Here’s a concise breakdown of how VPNs and VPCs differ in purpose, scalability, and security.

	VPN	VPC
What it is	Software/service that encrypts internet traffic.	A private section of a cloud provider’s network.
Purpose	Secures the privacy of data in transit between a user’s device and a network.	Provides an isolated cloud environment to securely run apps, servers, and data.
Privacy angle	Outsiders can’t read your internet traffic.	Other cloud customers can’t access your resources.
Typical use case	Employees connecting securely to company resources from anywhere.	Running business-critical apps and databases in an isolated cloud environment.

What Is a Virtual Private Cloud (VPC)?

A virtual private cloud (VPC) is an Infrastructure as a Service (IaaS) platform that allows you to create a private cloud on a public cloud. 

The private cloud is isolated from other subscribers on the public cloud, which means you have your own secure cloud space on the cloud for storing customer records, internal business files, application data, and other sensitive information, and to exchange it safely with teams or partners. 

Plus, you have almost full control over the private cloud; you set your own network addresses, assign permissions by user, and control which applications or services in the cloud can access your private resources. 

When Do You Need a VPC?

The everyday internet user likely doesn’t need a VPC; it’s a more business-targeted solution. For example, you may need a VPC for the following reasons:

• Running sensitive applications, like databases with customer data
• Connecting your company’s on-premises network to the cloud securely
• Separating different apps or environments (e.g., testing vs. production)
• Meeting security or compliance rules that require isolation

How a VPC Works

You build and configure a VPC inside a cloud provider’s platform. Most popular cloud service providers offer the service, including Microsoft Azure and Amazon Web Services (AWS).

Although the VPC management tools they offer can vary to a certain extent, all of them generally offer the following components that work together to control your network:

IP Addressing and Subnets

Every VPC starts with IP addressing. You either bring your own IP range or your provider assigns one to you. This range is the pool of addresses your resources will use to communicate inside the VPC. 

Once you have that range, you divide it into subnets. A subnet is simply a smaller slice of your network. By creating subnets, you decide which resources belong together and how traffic flows between them. 

For example, you can place your public web servers in one subnet so they’re accessible from the internet, while keeping your private databases in a separate subnet that stays hidden. This structure gives you control, keeps sensitive systems secure, and reduces unnecessary traffic between resources.

Routing Tables

A routing table is a set of rules that tells traffic where to go next: it determines how traffic moves between subnets and beyond your VPC. 

By default, traffic inside your VPC can move within the same subnet, but it won’t know how to reach another subnet or the internet until you define those routes. 

You can, for example, set a route that allows traffic from your public subnet to reach the internet through a gateway while keeping your private subnet restricted to internal communication only. This helps prevent network congestion and ensures the timely delivery of information.

Gateway Endpoints

You can use two main approaches to control how your VPC communicates with other cloud services and networks: endpoints and gateways. 

An endpoint establishes a private connection from your VPC to a supported cloud service without sending traffic across the public internet. This keeps communication faster and more secure. For example, in AWS you can use a gateway endpoint to connect privately to storage or database services like Amazon S3 or DynamoDB. Other platforms provide similar functionality under different names, such as Azure Private Endpoints or Google Cloud’s Private Google Access.

Gateways, by contrast, control how your VPC exchanges traffic with the internet, other networks, or other VPCs. An internet gateway lets your resources reach the public internet. A NAT gateway allows instances in private subnets to make outbound connections while blocking inbound requests. A transit or virtual gateway can serve as a central hub that links multiple VPCs or connects your VPC to on-premises networks.

Traffic Monitoring

Traffic monitoring tools vary by provider, but flow logs and traffic mirroring are common. A flow log gathers information about IP traffic traveling between the network interfaces within a VPC. Some services offer traffic mirroring to replicate traffic from network interfaces. This allows you to send it directly to your network security team or through a chosen monitoring tool for deep packet inspection (DPI). 

Benefits of a VPC

1. Overall Scalability

Companies can add or remove VPC resources as needed, making it a flexible and affordable option. This means you can customize a VPC to the company’s liking and adjust the amount of resources it purchases based on demand. If the company has existing compatible hardware (e.g., servers, PCs, routers), no additional physical hardware is necessary since VPCs are cloud-based.

2. Includes Security Options

Some VPCs, including those offered by Amazon Web Services, provide the option of VPN software with the service. You can integrate the VPN into the cloud service to provide a more secure connection to the VPC and public cloud applications.

While VPCs already have security in place for access and authentication, the VPN creates a secure connection to any network or cloud service, encrypts all network traffic, and provides an additional level of user authentication.

3. Increased Performance

VPCs allow companies to prioritize specific traffic, optimizing virtual cloud performance. This helps prevent network jitter and traffic backup that can lead to network congestion.

4. Better Data Control

It’s uncommon for public cloud data to get mixed up en route, but not impossible. That’s why each virtual network is isolated from the next, significantly reducing the risk of any form of external or internal data crossing wires between users.

5. Simple to Integrate

Once a VPC is in place, it’s fairly simple to integrate it with other infrastructures, including other VPCs, public clouds, physical hardware, VPNs, and more. 

What Is a Virtual Private Network (VPN)?

A virtual private network (VPN) creates a secure, encrypted tunnel over the public internet so that data can move safely between networks or devices. In business, this usually takes two forms: a site-to-site VPN or a remote access VPN.

• A site-to-site VPN links entire networks: For example, it can connect a branch office to headquarters so that resources on both sides can communicate securely and as if they were part of the same private network. Each network uses a VPN gateway, and the encrypted tunnel ensures that traffic remains private and tamper-proof.
• A remote access VPN works at the individual level: It allows employees to connect securely from external locations to the company network. 

In practice, that means employees can work from anywhere, and offices in different regions can share resources, all without exposing sensitive data directly to the internet.

When Do You Need a VPN?

A VPN is beneficial to companies and individuals, and is often used in combination with a VPC as well as other applications. You may need a VPN when:

• Connecting multiple office locations through encrypted site-to-site links
• Giving employees secure remote access to internal applications and data
• Protecting sensitive data in transit such as customer records or financial information
• Replacing expensive private circuits with secure internet-based connections

Benefits of a VPN

1. Improved Security and Privacy

A VPN encrypts all traffic moving between networks, which prevents outsiders from intercepting or reading sensitive data. At the same time, it hides your internal IP addresses and network layout, making it harder for attackers to map and target your systems.

2. Remote Access for Employees

Companies can provide staff with secure access to internal systems and applications from anywhere in the world. Whether employees are working from home, traveling, or logging in from a branch office, the VPN ensures their connection is protected.

3. Cost Savings

Instead of relying on expensive dedicated private lines, companies can use a VPN to securely send traffic over the internet. This reduces networking costs while still providing the level of security businesses require.

4. Improved Performance

VPNs can improve connection stability by providing a dedicated, optimized route for traffic. In some cases, this reduces bottlenecks or throttling on public networks, resulting in more consistent performance for critical applications.

5. Flexible Connectivity

A VPN supports business growth by making it easier to bring new offices, partners, or remote teams online without complex new infrastructure. You can quickly establish secure links to additional locations over the internet instead of building dedicated private connections.

Why You Should Use a VPN with a VPC

While VPCs and VPNs each provide distinct advantages, many businesses find that combining both technologies creates a more robust and secure infrastructure, so it’s a good idea to understand how these technologies complement each other.

A VPC protects the workloads and resources inside its own environment. It can isolate traffic, enforce access controls, and even encrypt data as it moves within the VPC. But a VPC on its own doesn’t secure the path between your office network and the cloud. When you send data across the public internet to reach your VPC, that traffic is exposed unless you add another layer of protection.

That’s where a site-to-site VPN comes in, creating an encrypted tunnel between your corporate network and your VPC. All traffic that passes through this tunnel is protected from interception, so sensitive business data remains private even as it moves between your network and the cloud.

This secure tunnel is what makes it possible to tie your office network and your cloud environment together. Instead of treating them as two separate systems, combining a VPN with a VPC in platforms like AWS or Google Cloud extends your network boundaries into the cloud. Your resources communicate as if they were part of one private environment, keeping every connection encrypted end to end.

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