Virtual private clouds (VPC) are secure computing clouds, generally hosted and isolated by a large public cloud provider. They can be accessed via VPNs, physical direct connections, public IPs that are often secured with firewalls, service endpoints, cloud consoles, or transit gateways.
Think of VPC as analogous to renting a private storage space at a large, public, secure storage facility. While the larger space may have other customers, access to your storage area is secure and specific services are configured for you. Though the infrastructure overall is shared, it is a scalable space reserved and protected exclusively for individual tenants.
A cloud within a cloud
The host or public cloud computing provider may be external-facing and widely accessible, but VPCs are the cloud within the cloud and allow enterprises to benefit from the provider’s wraparound ecosystem of resources, architecture, and management without hardware constraints. They simultaneously allow enterprises to create a customizable virtual environment for storing data, creating servers and processing code, among other things, at scale.
VPCs are a viable option for enterprises seeking a cost-effective model to run varying workloads because they tend to be offered on a pay-per-use pricing model. However, they can require extensive investments on the front-end for setup.These nuanced cloud costs inlcude data transfer fees, NAT Gateway charges, VPN costs, among others
VPCs the domain of hyperscalers
While some providers offer managed services on top of public cloud or private cloud solutions, core VPC services are typically the domain of the major public cloud providers (aka the hyperscalers such as Amazon Web Services (AWS), Google Cloud and Microsoft Azure).
Hyperscalers are massive pubic cloud providers that operate data centers with vast computing, storage, and networking resources. Their infrastructure is designed for extreme scalability and includes a wealth of cloud services, and VPC is a fundamental networking component within their broader infrastructure-as-a-service (IaaS) offerings.
So, in short, a VPC isn’t a standalone product you buy from a niche vendor. It’s the foundational network layer upon which you build and deploy all your other cloud resources (virtual machines, databases, serverless functions, etc.) within a public cloud environment. Without a VPC, you can’t logically isolate your resources within these large public clouds.
Virtual private cloud (VPC) FAQ
A virtual private cloud is a logically isolated virtual network within a public cloud environment. Imagine it as your own private, secure section within a massive, shared public cloud, where you control your network configurations, IP addresses, subnets, and security settings.
VPCs are primarily offered by hyperscale public cloud providers like Amazon Web Services, Microsoft Azure, Google Cloud Platform, IBM Cloud, and Oracle Cloud. They are a fundamental building block of their infrastructure-as-a-service (IaaS) offerings.
Not exactly. A private cloud is an entire cloud infrastructure dedicated solely to one organization, which can be hosted on-premises or by a third-party. A VPC is a private segment within a public cloud.
Security and isolation: To keep their data and applications separate from other users on the public cloud.
Customization: To define their own IP address ranges, subnets, route tables, and network gateways.
Scalability: To easily expand or shrink their network and resources as needed, leveraging the public cloud’s elasticity.
Compliance: To meet regulatory requirements by controlling traffic flow and access at a granular level.
VPCs are considered highly secure. The “virtual” in virtual private cloud refers to the strong logical isolation provided by the cloud provider’s network virtualization technologies. This isolation, combined with the comprehensive security features you can configure makes VPCs suitable for even highly sensitive workloads.
Challenges include complexity, misconfigurations, cost management, and vendor lock-in.
Only hyperscalers have the capital, engineering talent, and global presence to build and maintain the underlying physical infrastructure that makes VPCs possible at scale. They pass on the benefits of these economies of scale to customers through their pay-as-you-go models.
The power of a VPC comes not just from its isolation but also from its seamless integration with the hyperscaler’s vast ecosystem of other services (e.g., identity and access management, monitoring, load balancers, managed databases, AI/ML services). A point solution vendor would struggle to replicate this level of integration and breadth of offerings.
Key features of a virtual private cloud
Within the public cloud provider’s larger network, each VPC is separated via private IP addressing and divided into subnets that isolate resources internally. Customized routing protocols (or route tables) work to keep internet traffic secure within the VPC. Unless they are explicitly designed to be connected, one VPC will not be connected to or capable of communicating with another VPC.
There are also security checks built in at multiple levels. Network access control lists (NACLs) help manage inbound and outbound traffic to the VPC’s subnets and act like a firewall. Network address translation (NAT) works to help initiate secure outbound internet connections from within the VPC. NATs keep backend resources private by translating an internal private IP address to a public one for an outbound internet connection.
Many VPCs also include identity and access management (IAM) tools, which allow control over permissions related to who can see and alter different aspects within the VPC at an even more granular level.
Sometimes public cloud providers set aside designated servers for VPCs for even more secure physical isolation within its infrastructure.
Customizable network configurations within VPCs make it so enterprise customers are not restricted to default cloud provider settings—allowing for tailored preferences over IP address ranges, gateway access, and overall security specifications based on need.
Benefits of using a virtual private cloud
Not only do enterprises using VPCs not have to worry about investing in physical hardware like servers or data centers, but using a virtual private cloud lets a company expand or shrink its network to fit its needs. If demand increases, within the VPC, enterprises can set up more servers, add IP addresses, subnets and adjust load balancers without spending resources significant or downtime doing so.
Because they operate on computing resources from a public cloud provider, VPCs are generally reliable since they span different availability zones. If one zone has an issue, others continue working, thereby protecting the VPC from failure and minimizing the risk of extensive downtime.
Depending on the specific needs of an enterprise, VPCs are also capable of seamlessly integrating with databases, analytics, artificial intelligence processes, machine learning services and other services within a cloud ecosystem.
Using a VPC can also offer enterprises an easy way to ensure the company is in compliance with regulatory mandates related to traffic monitoring and auditing.
Drawbacks of a virtual private cloud
While VPCs may be more cost-efficient compared to building infrastructure on-premises from scratch, they can be complex to set up. Sometimes, misconfigurations with settings can also introduce vulnerability points.
While VPCs are considered relatively secure, data still travels via the internet and securing it further with VPNs or direct connections can add additional costs and also latency.
When working with a public cloud provider that hosts a Virtual Private Cloud, there is also vendor lock-in. At any point, if an enterprise wants to switch providers, migrating resources can become both cost-draining and a time-suck.
Virtual private cloud under the hood
The core architectural components of a VPC are subnets, route tables, gateways, NACLs, domain name systems and dynamic host configuration protocols.
Subnets and route tables work together to segment and control traffic flow. When a user lands on a website that is hosted via a private cloud, the web server is typically in a public subnet that queries a database hosted in the private subnet. Route tables link to the subnets to direct where traffic goes from there, i.e., out to the internet via a gateway, to another subnet for internal traffic, or to an on-premise network like a VPN.
The public subnets within a VPC use internet gateways to allow inbound and outbound traffic, while private subnets rely on NAT gateways and control access to the internet for internal servers. NAT gateways also work to block unwanted inbound connections.
Security groups act as the firewall systems that protect VPC resources by allowing or denying traffic based on IP addresses, ports and protocols. Network ACLs are similar, but operate at the subnet level and must have rules for inbound and outbound traffic defined, but they can be used to block IP addresses or specific access controls.
Virtual private gateways within the cloud can be used to connect to a gateway that is on-premises. It essentially creates a VPN privacy connection, so cloud resources can communicate securely with on-premise systems as if they were in the same local network.
Subnets, route tables, internet gateway, security groups, network access control lists, VPN/direct connect gateways make up the core elements of a VPC.
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If an enterprise has multiple VPCs, peering mechanisms can be used to link them together so they can communicate without using the internet. Transit gateways can also be used for this.
Dynamic Host Configuration Protocol (DHCP) is used to define domain names and Domain Name System (DNS) servers inside of Virtual Private Clouds, which can be useful if cloud resources need to join on-premises domains in a hybrid network, for instance.
Considerations for implementing a VPC
Some common missteps when implementing a VPC for the first time can range from IP address conflicts, misconfigured security groups, limited visibility issues with traffic, scaling NAT gateways, and managing bandwidth limits due to high latency.
It’s important to ensure classless inter-domain routing for assigning IP addresses is done carefully so there is no overlap. Similarly, to avoid issues with misconfigured security, use testing environments and audit tools to check that everything is in place. For visibility limitations, consider creating flow logs or using third-party tools to enhance this and avoid networking issues. To more easily scale an NAT gateway, consider splitting traffic with multiple NATs or centralizing it somehow. If issues arise with bandwidth or latency related to your VPC, use a direct connection for any large or critical workloads.
Essential, too, is defining how to segment workloads through various private or public subnets, understanding compliance and performance needs, determining the workloads that need to run in the VPC like apps, testing or databases, and accounting for growth so you can plan for bandwidth, subnet sizes and be prepared to distribute workloads across multiple availability zones as needed. Use of auto-scaling and load balancing is also recommended.
It’s best practice to use least privilege access principles for identity access management and security groups within VPCs.
To optimize cost, be sure to regularly clean up unused Elastic IP and NAT gateways as well.
What’s next for virtual private clouds
The major players currently leading the Virtual Private Cloud provider space are Amazon Web Services, Microsoft Azure, Google Cloud Platform, Oracle Cloud Infrastructure and IBM Cloud.
Many offer hybrid cloud deployments and varying integration elements.
As cloud integration and adoption continue to rise, virtual private clouds are expected to evolve in scalability and security.
Artificial intelligence (AI), just as it is changing many fields, is doing the same for VPCs. Advanced machine learning to predict scaling features as well as AI-powered traffic routing will likely become available across vendor offerings more and more.
Security features are also expected to advance and become more integrated with zero trust network access models. Cross-cloud networking and serverless networking are also gaining traction, which will enhance functionality overall.
Source:: Network World