Understanding the Difference Between VPN and VNet Peering in Azure

Understanding the Difference Between VPN and VNet Peering in Azure - Image


With the rise of cloud services, Microsoft Azure offers a multitude of solutions to connect networks and secure communication between resources. Two key technologies often compared are VPN (Virtual Private Network) and VNet Peering. This article explores the workings of these two technologies in depth, providing concrete examples and highlighting the key differences.

How a VPN Works

A VPN, or Virtual Private Network, allows the creation of a secure and encrypted connection between two networks over the Internet. In the context of Azure, a VPN is commonly used to connect an on-premises network to an Azure virtual network, or to connect two Azure virtual networks located in different regions.

Types of VPN in Azure

Site-to-Site VPN

Connects an on-premises network to an Azure virtual network. It’s ideal for extending local networks to the cloud.

Point-to-Site VPN

Allows individual clients to connect to an Azure virtual network from anywhere via a secure connection.

VNet-to-VNet VPN

Connects two Azure virtual networks, often located in different regions.

Connection Process

VPN Gateway

A VPN gateway is deployed in the Azure virtual network. This gateway is responsible for managing the VPN connection.

Secure Tunnel

A secure connection is established between the VPN gateway and the remote network or device, using protocols like IPsec.


Traffic between networks is encrypted, ensuring that data remains confidential and protected from interception.

Concrete VPN Example

Imagine a company with a headquarters and multiple branch offices. To secure communications between the headquarters and branches, a Site-to-Site VPN can be used to establish secure connections to an Azure virtual network hosting critical application. This allows all branch offices to access the applications securely, as if they were on the same local network.

How VNet Peering Works

VNet Peering, or virtual network peering, allows the connection of two virtual networks (VNets) in Azure. Unlike a VPN, VNet Peering is a direct connection between virtual networks within Azure, without the need for encryption or VPN gateways.

VNet Peering Configuration

Direct Connection

Peering allows for low-latency, high-bandwidth connections between VNets. It uses Azure’s backbone infrastructure to route traffic directly between networks.

Network Access

Resources in peered VNets can communicate with each other as if they were on the same network.

Security and Controls

Network security group (NSG) rules and routing policies can be used to control and secure traffic between peered networks.

Peering Process

Peering Initiation

Peering is initiated from the Azure portal, where administrators can configure settings and accept the peering connection.

No Encryption

Unlike VPN, traffic between peered VNets is not encrypted, as it does not traverse the public internet but stays within Azure’s private infrastructure.

Concrete VNet Peering Example

Suppose a company has several departments, each with its own applications deployed in separate VNets. VNet Peering allows fast and seamless communication between these VNets, facilitating application integration between departments without the complexity and latency associated with VPNs.

Key Differences Between VPN and VNet Peering

Latency and Bandwidth

VNet Peering: Offers lower latency and higher bandwidth since traffic remains on Azure’s backbone.

VPN: Can introduce additional latency and limited bandwidth due to encryption and traversal of the public internet.


VNet Peering: Does not encrypt traffic as it uses Azure’s private infrastructure.

VPN: Provides strong encryption (IPsec) to secure traffic over the public internet.

Use Cases

VNet Peering: Ideal for internal Azure communication between different VNets.

VPN: Perfect for connecting on-premises networks to Azure, or VNets in different regions.

Configuration Complexity

VNet Peering: Relatively simple to configure and manage via the Azure portal.

VPN: Can be more complex, requiring gateway and tunnel configurations.

Training and Support

To fully leverage the capabilities of VPN and VNet Peering in Azure, comprehensive training is essential. Eccentrix offers the specialized Microsoft Certified: Azure Security Engineer Associate (AZ500) training program that covers all aspects of these technologies, from basic configuration to advanced management. These training sessions are designed to equip IT professionals with the knowledge and skills necessary to effectively implement and manage these solutions in their environments.


VPN and VNet Peering are essential tools for connecting and securing networks in Azure. While VPN provides a secure and encrypted connection ideal for communications over the public internet, VNet Peering offers fast and direct connections between virtual networks within Azure. Understanding the key differences and appropriate use cases for each technology allows organizations to choose the solution best suited to their needs.


What is the main difference between a VPN and VNet Peering in Azure?

VPN uses encryption to secure connections over the public internet, while VNet Peering provides a direct, low-latency connection between virtual networks within Azure.

When should I use a VPN instead of VNet Peering?

Use a VPN when you need to connect on-premises networks to Azure or VNets in different regions. Use VNet Peering for fast and seamless communication between VNets within Azure.

Does VNet Peering encrypt traffic between networks?

No, VNet Peering does not use encryption as it relies on Azure’s private infrastructure. However, traffic is still secure within Azure’s backbone.

Can I combine the use of VPN and VNet Peering?

Yes, it is possible to combine both technologies to meet different connectivity and security needs within the Azure infrastructure.