What Is a Virtual Private Cloud (VPC)? Importance and Benefits
A virtual private cloud (VPC) is a private cloud-like computing environment within a public cloud.
An isolated private cloud environment sets aside specific computing bandwidth for exclusive use and combines the scalability of the public cloud with private cloud data isolation capabilities. Organizations use virtual private cloud (VPC) software to deploy these single-tenant private cloud environments.
Imagine a public cloud as a large home. Each room of the home serves a purpose. Their variations stem from each room’s functional differences. Similarly, organizations create private cloud environments within a public cloud to maintain databases, test applications, host websites, and execute operations. These environments to the public cloud are what rooms to a home.
What is a virtual private cloud?
A virtual private cloud (VPC) is a secure and isolated network within a public cloud. VPCs isolate data during transit and inside the network with security policies.
Organizations use VPC systems to store data, host websites, and run applications. VPC solutions use different policies, including private internet protocol (IP) addressing, encryption, network gateway, subnets, route tables, tunneling, and virtual local area network (VLAN).
How is a virtual private cloud different from a private cloud?
A private cloud is a single-tenant, dedicated, and customizable cloud solution that doesn’t share cloud resources with other tenants. This model isolates and delivers computing resources using a secure private network. Organizations can either build a private cloud on-premises or host it in a third-party data center.
Why do organizations use private clouds?
Organizations adopt private cloud environments to:
- Meet regulatory compliance requirements
- Have greater visibility and control into the infrastructure
- Manage sensitive information such as personally identifiable information (PII), financial data, confidential documents, and intellectual property
Private clouds and virtual private clouds are not interchangeable. People often think they are similar because of a VPC’s dedicated single-tenant architecture.
A virtual private cloud resides in a hyper-scalable public cloud, making it different from a private cloud. VPCs use individual private IP subnets to isolate user resources and VLANs to connect with other VPCs.
Who uses virtual private clouds and why?
Enterprises use virtual private cloud solutions to benefit from the scalability of public cloud computing and the data isolation capabilities of private cloud computing. They use it to create private cloud environments for hosting web applications, storing data, and running databases. Other benefits include isolation, scalability, improved security, and compliance.
Virtual private cloud features
The logically isolated nature of VPCs ensures application security and offers you complete control over the virtual networking environment. Furthermore, organizations can have total peace of mind as VPCs are highly elastic, flexible, scalable, and portable. Let’s take a closer look at the features that make this possible.
- High availability: Your infrastructure is available even when an availability zone (AZ) goes down or a component fails. A VPC ensures high availability with redundant resources and fault-tolerant AZs.
- Improved security: Virtual private clouds assure complete access control over resources and workloads with robust encryption, configuration management, and change management. Also, the logical isolation of a VPC protects your data from being visible or accessible to others.
- Business agility: VPCs also scale resources dynamically, meaning you can deploy cloud resources, cloud-native apps, or control virtual network size per your business needs. This enables you to create new environments or close canceled projects quickly.
- Affordable solutions: Virtual private cloud solutions combine public clouds’ scalability and the private cloud’s cost-efficiency. Adopting VPCs helps you save on labor costs, hardware expenses, and other resources.
Benefits of virtual private cloud
Organizations looking to build resilient and scalable infrastructures often adopt virtual private cloud software because of its features. The main benefits of VPC include:
Reduced data lifecycle risks
Despite being a part of the public cloud, virtual private cloud tools logically isolate user data and prevent unauthorized access by other users within the multi-tenant structure. This logical isolation keeps your data secure both at the instance and subnet levels.
The traffic between resources is not vulnerable unless it leaves a VPC or you route traffic through the public internet. Modern VPC tools use third-party applications to automatically detect and manage different types of threats, including distributed denial of service (DDoS).
Easy integration and upgrades
You don’t have to worry about expensive upgrades since VPC software providers upgrade hardware incrementally to ensure minimum downtime and faster server workloads. You can also easily integrate VPCs with a public cloud or an on-premise infrastructure, meaning you have the flexibility to synchronize more than one cloud.
Performance and productivity
VPC systems allow you to prioritize specific application network traffic and end blockages. This traffic prioritization significantly enhances application performance, compared to local on-premise servers. Organizations opting for VPC software require less dedicated IT resources and focus more on productive tasks, since the VPC provider takes care of minor and major issues.
Customer satisfaction
Virtual private cloud environments ensure high availability with fault-tolerant architectures and redundant resources. This availability enables organizations to meet customers’ uptime expectations and support online transactions in digital business environments.
Three-tier architecture in virtual private cloud
VPC software gives organizations complete control over a virtual networking environment, which is crucial for smoothly running critical applications in logically isolated sections of the public cloud. This is possible because of modern virtual private cloud servers’ three-tier architecture. These three interconnected tiers are the web tier, application tier, and database tier. You must assign an individual subnet to each tier to have a unique access control list (ACL).
- Web tier: This tier is also known as the presentation tier. It accepts web browser requests and offers end-users information from other layers. A web tier also generates content dynamically, maintains user session state data, and controls content flow.
- Application tier: Also known as the logic tier or middle tier, the application tier processes information collected by the web tier using business logic and specific business rules. This tier acts as a web firewall and secures the processing engine between the web and database tiers.
- Database tier: This tier typically stores and manages data using database servers. However, many web database applications use relational databases to store data and relational database management systems (RDBMS) to manage data. A database tier is also responsible for update management, concurrent access, data security, and integrity.
VPC logical instances
The three-tier architecture allows organizations to deploy three cloud resources or logical instances in their isolated virtual networks.
- Compute: A virtual server instance (VSI) is a server environment that converts a physical system into a logical computing resource pool. Each VSI is a part of the larger cloud infrastructure and continuously communicates with other virtual servers. VSIs act as virtual control processing units (vCPUs) to users and leverage local disk or storage area network (SAN)-based storage.
- Storage: VPC software comes with a block storage quota for each user and offers additional hard drive space for purchase. Block storage software provides both primary and secondary boot volumes, and redundantly stores data across multiple disks in AZs. You can use this block storage to rapidly provision data for scaling across zones and additional performance.
- Networking: VPC systems allow users to control resource access using different virtual networking functions.
Virtual networking functions
- Public gateways make some VPC environment areas available on the public-facing internet.
- Load balancers optimize availability and performance by balancing load across VSIs.
- Routers enable network segment communication by directing traffic between private cloud and VPC resources.
How does a VPC work in a public cloud?
Modern VPCs resemble traditional data center networks, but simplify the process of launching resources in a defined virtual network. If your DevOps team has limited experience handling VPCs, you’ll need to know these technical terms.
Subnets
A subnet refers to an IP address range and resides within an available zone. You can launch resources into a specific public or private subnet. Public subnets are suitable for resources that need internet connectivity, while private subnets work for resources that don’t.
Subnets also protect resources using NACL and network security groups. Some VPC software allows you to create VPN-only subnets for establishing site-to-site VPN connections.
Subnet configurations
While creating subnets, you can opt for one of these three configurations:
- IPv4-only allows instances within a subnet to communicate using IPv4 only.
- IPv6-only facilitates instance communication using IPv6 only.
- Dual stack uses both IPV4 and IPv6 for communication between instances.
Subnets allow users to modify the following settings post-creation:
- Auto-assign IP automates public IPv4 or IPv6 address requests for new network interfaces within a subnet.
- Resource-based name (RBN) specifies instance hostname type and configures record query handling.
Default and non-default VPCs
VPC systems usually offer a default VPC with a default subnet when launching an instance. You can also create a non-default VPC by selecting custom configurations. Subnets within non-default VPCs are known as non-default subnets.
Route tables
Route tables direct network traffic using a set of rules or routes. Every route in a route table defines destination IP addresses, network interface, and gateway. VPC software implicitly uses main route tables for every subnet. You can also explicitly connect subnets with particular route tables.
Internet access control
Internet access control specifies how instances interact with resources outside the VPC. For example, a default VPC with a default subnet uses an internet gateway to communicate with the internet. Non-default subnets with private IPv4 addresses can only communicate and access the internet when attached to an internet gateway. You can also use a NAT device to let instances connect with the internet and prevent unauthorized inbound access at the same time.
VPC networking components:
- IPv4/IPv6 address blocks connect devices to the internet services.
- Route table specifies rules for directing network traffic inside VPC, among subnets, and across targets such as internet gateway, virtual private gateway, VPC peering connection, and network address translation (NAT) (way of mapping IP addresses for information transfer) gateway.
- Subnet offers a common address component for all devices. Private subnets protect your data from the outside world while public subnets use an internet gateway to expose resources to the internet.
- Security groups control traffic to your instance using a set of firewall rules. A single security group can serve multiple subnets.
- NAT gateway updates private subnet route tables to ensure higher bandwidth and availability. A NAT gateway supports only internet control message protocol (ICMP), user datagram protocol (UDP), and transmission control protocol (TCP). ICMP is a network layer protocol that diagnoses network communication issues whereas UDP facilitates message exchange between computing devices. TCP enables message exchange between application programs and computing devices.
- VPC peering facilitates data transfer and routes traffic between two VPCs using IPv4 or IPv6 private addresses.
- Network access control lists (NACL) acts as an additional security layer and controls incoming and outgoing traffic of subnets.
- Virtual private gateway concentrates server-side VPN connections.
- Customer gateway links customer data center to a VPC and can be a physical or software appliance.
- Elastic IP offers a reserved public IP address which you can assign to any instance in a particular region.
- Network interface sits between a public and private network to enable network connectivity.
- VPC endpoints maintain connection privacy between VPC and a cloud service provider.
Virtual private cloud vs. virtual private network
The key difference is that a virtual private cloud helps enterprises scale for traffic requirements without hardware limitations, whereas a virtual private network helps organizations and individuals alike in encrypting internet traffic.
A virtual private cloud runs in a shared public cloud infrastructure. It uses a private IP subnet or virtual local area network to isolate an organization’s resources from other cloud tenants.
A virtual private network (VPN) protects network connection by encrypting device-to-network traffic. This encryption ensures the safe transmission of data and prevents unauthorized access to the traffic. Organizations with sensitive data often use VPNs to protect sensitive data.
Challenges of virtual private cloud solutions
Organizations use VPC software to avoid putting data on a public cloud and leverage granular network control and security. Despite these benefits, organizations often come across the following VPC implementation challenges.
Implementation cost
VPCs help you save labor and hardware costs but are relatively more expensive than public or on-premise private clouds. While the specifics vary depending on the VPC software, consider calculating ingress and egress costs of data movement and hourly private connection charges.
Latency
VPC systems that use private connection or open internet may suffer from latency, as VPCs travel back and forth between on-premise firewalls and VPC systems. Application requirements, VPC location, and type of encryption also contribute to latency.
Restrictive customization
Depending on the VPC tool, you may have limited customization options compared to a private cloud. Organizations with customization needs may find this restrictive. Some VPC architectures are also prone to outages.
Virtual private cloud use cases:
- Multi-tier web app hosting demands restrictive access control and server layer communication.
- Public website hosting needs instance-level firewalls and outbound traffic restrictions.
- Business unit networks require access configuration for instance provisioning within a VPC.
- Corporate network extension involves additional resource provisioning.
- Disaster recovery backs critical data for business continuity.
VPC implementation best practices
VPC software provides organizations with complete virtual network control, including network gateway configuration, route table setting, and IP address management. Regardless of the software you choose, it’s important to follow these best practices for creating and maintaining an effective virtual networking environment.
Find the right configuration
Selecting the right implementation architecture is key to successful VPC deployment. Consider gathering specific expansion requirements before choosing a software. These requirements will help you choose from public VPC, software-based VPN, and hybrid cloud storage software-based VPC.
Choose classless inter domain routing
Data center connectivity types and number of IP addresses are two key things to consider while designing a VPC instance. It’s best to choose classless inter domain routing (CIDR) (a method for assigning IP addresses and IP routing) blocks with more IP addresses and ensure VPC CIDR blocks don’t interfere with the ones in an on-premise data center. Organizations should also create a separate VPC for development, production, and staging for isolating VPC environments.
Implement VPC security
You should add multiple security layers to VPC systems handling mission-critical workloads and resources.
Common security tools:
- Web application firewall protects web applications and application programming interfaces (APIs) from common exploits.
- Intrusion detection systems secure protocols and prevents unauthorized access.
- Identity access management audits and monitors VPC administration access.
- Site-to-site VPN transfers data between an on-premise data center and a VPC.
- Secure file transfer protocol (SFTP) transfers information securely.
- Proxy and security system limits threatening ports and logs passing traffic.
Develop a disaster recovery plan
Avoid on-premise subnet CIDR block conflicts to ensure smooth integration with on-premises data centers. Once you create the CIDR blocks, consider instantiating a VPC to connect an on-premise data center with regions within the VPC environment. This will help in data replication using private IPs.
Route traffic with VPC peering
VPC peering routes traffic between two VPCs using private IP addresses. Try routing traffic with VPC peering to:
- Share systems across different VPC systems
- Integrate system access with core suppliers
- Offer private and secure access to interconnected applications within the VPC system
Virtual private cloud software
Choosing the right cloud provider is key to creating scalable and secure computing bandwidth. VPC software providers offer robust features for business agility, security, and high availability.
To be included in this category, a software product must:
- Configure public cloud resources to isolate a private network
- Abstract the private cloud through private IP addresses, subnets, or virtual networks
- Allow administrators remote access to computing resources
*Below are the top 5 leading virtual private cloud software solutions from G2’s Spring 2023 Grid® Report. Some reviews may be edited for clarity.
1. Amazon Virtual Private Cloud (VPC)
Amazon VPC eases the process of launching Amazon Web Services (AWS) resources in a logically isolated virtual network. This VPC software gives users complete control over the virtual networking environment, including connectivity, security, and resource placement.
What users like best:
“Amazon VPC allows users to launch other AWS resources in an isolated virtual network. We can identify discrepancies or secure applications by checking traffic in and out of the VPC. We can also create subnets to divide the overall IP addresses into multiple logically segmented IP addresses. The security groups and network ACLs help us allow and block the incoming/outgoing traffic from resources like EC2 and lambda inside the VPC.”
– Amazon Virtual Private Cloud (Amazon VPC) Review, Sagar G.
What users dislike:
“The only thing which is not good is that the VPC is exceptionally costly and charges more than a complete deployment. It also cannot create a peering network from other regions.”
– Amazon Virtual Private Cloud (Amazon VPC) Review, Zobia K.
2. Oracle Cloud Infrastructure VPN for Dedicated Compute Classic
Oracle Cloud Infrastructure VPN for Dedicated Compute Classic offers secure private network expansion opportunities for enterprises. This VPC product lets organizations use IPSec tunnels for connecting dedicated compute classic zone as part of virtual private networks.
What users like best:
“I like how easy is to start working on Cloud with Oracle, is easy to create a compute VM, a database, a VCN, and even easier to make a VPN S2S. If you have worked with AWS or Azure before, you already have good knowledge to start working with Oracle Cloud.”
– Oracle Cloud Infrastructure VPN for Dedicated Compute Classic Review, Adrian Alberto P.
What users dislike:
“Learning how this product performs with suitable integration models takes time and a lot of resources for new organizations. Performance and data networking has been good.”
– Oracle Cloud Infrastructure VPN for Dedicated Compute Classic Review, Valerie B.
3. Rackspace Managed Private Cloud
Rackspace Managed Private Cloud offers a modern private cloud solution that features security of a single tenant environment and efficiency of a public cloud. Organizations can use this solution to consolidate hosting activities through on-site or third-party data centers.
What users like best:
“Once Rackspace Managed Private Cloud is set up, it’s practically maintenance-free. I love their tech support! Any time I have reached out with an issue, even if it did not entirely pertain to Rackspace, they were able to offer a solution. Top-notch support!”
– Rackspace Managed Private Cloud Review, Marc S.
What users dislike:
“Delay in customer support. Most of the time, we have to wait on the waiting list. Need tutorial and documentation. direct calling was not available from Asia which isn’t user-friendly.”
– Rackspace Managed Private Cloud Review, Rana Kayser B.
4. Aptible
Aptible offers a Docker-based platform as a service (PaaS) solution for moving code to the cloud – without the hassle of managing servers. This VPC tool saves valuable time, manages infrastructure operations, and complies with security frameworks, including the Health Insurance Portability and Accountability Act (HIPAA), Health Information Trust Alliance (HITRUST), and Service Organization Control 2 (SOC 2).
What users like best:
“Our small healthcare startup couldn’t have gotten off the ground without the ease and speed of Aptible’s hosting. We focused on developing our application and Aptible covered the rest. We’ve since gone through numerous vendor reviews with subsequent customers, and each time Aptible’s reliability and capabilities help advance the opportunity.”
– Aptible Review, Tammy H.
What users dislike:
“Some common processes, like releasing a new Docker image to production, go through a general release process that always feels like it takes too long – from 20 to 25 minutes. Lower latency would be better!”
– Aptible Review, Robert N.
5. Alibaba Virtual Private Cloud
Alibaba Virtual Private Cloud offers isolated cloud networks for operating resources in a secure environment. This VPC software can connect a VPC and a traditional internet data center (IDC) using a leased line, VPN, or generic routing encapsulation (GRE).
What users like best:
“It’s a great platform for deploying infrastructure as a service (IaaS). I like that I’m not limited by the costs of blocking and licensing the provider. The overall experience has been very positive, from planning and decision-making to implementation and user support. They also have high-quality hardware and fast and reliable network providers.
– Alibaba Virtual Private Cloud Review, Kristina D.
What users dislike:
“The HTTP proxy has a few bugs. If you’re using a private address space for your CVMs and you want to add the cluster to a Prism Central instance, you’ll need to remove your proxy settings, add it to the Prism Central instance, and re-add your proxy settings.”
– Alibaba Virtual Private Cloud Review, Emily V.
Get the best of both worlds
Organizations that adopt VPC systems benefit from the public cloud’s scalability, elasticity, and flexibility, as well as the private cloud’s security and resilience. This software can easily create flexible subnets and custom network topologies without the high price. If you’re looking to develop an on-demand shared resource pool and simultaneously keep it secure, VPC is your go-to choice.
Learn more about cloud storage and how to choose the right provider before opting for cloud migration.
This article was originally published in 2022. It has been updated with new information.