AWS Virtual Private Cloud (VPC)

AWS VPC allows users to create a private, isolated section of the AWS cloud where they can launch and run their own services in-house.

By - Manish Kumar Barnwal
Updated on
August 21, 2023


What is AWS VPC?

AWS VPC is a powerful tool that enables customers to create a secure and scalable cloud environment that meets their specific business needs. Here are some key uses of AWS VPC:

  1. Network Isolation: VPC allows you to isolate your resources within a virtual network, providing greater control over security and network traffic.
  2. Customization: VPC allows you to customize your network topology, configure your IP addresses, and create subnets.
  3. Scalability: VPC can scale your network to meet the demands of your applications and services.
  4. Integration with Other AWS Services: VPC can be integrated with other AWS services such as EC2, RDS, and Lambda to provide a complete solution for running your applications.
  5. VPN and Direct Connect: VPC provides the ability to create VPN connections and use AWS Direct Connect to connect your on-premises network to your VPC.
  6. Security: VPC provides security features such as security groups, network ACLs, and flow logs to help you secure your network and monitor traffic.

How to create a VPC on AWS

By following these steps, you can get started with AWS VPC and create a secure and isolated virtual network environment for your applications and resources.

  • Sign Up/Sign In AWS account: The first step is to sign up for an AWS account if you don't already have one. You can sign up for a free account that provides you with limited access to AWS services.
  • Navigate to the VPC Dashboard: Once you are logged in, navigate to the VPC service by selecting "Services" from the top menu and searching for "VPC." Click on the "Amazon VPC" link to access the VPC dashboard.
  • Create a VPC: In the VPC dashboard, click on the "Create VPC" button to start creating your VPC. You will need to provide a name for your VPC and specify an IP address range for the VPC, known as the CIDR block.
Create VPC

Create VPC Dashboard

  • Configure Subnets: After creating the VPC, you can create subnets within it. Subnets are used to divide your VPC's IP address range into smaller segments. In the VPC dashboard, select "Subnets" from the sidebar and click on "Create subnet." Specify the subnet's name, VPC association, availability zone, and CIDR block.
Choose Subnets
  • Configure Route Tables: Route tables control the traffic between subnets and to the internet. In the VPC dashboard, go to "Route Tables" and click on "Create route table." Specify a name for the route table and associate it with your VPC. Then, add the necessary routes to enable communication between subnets and the internet.
VPC Created
  • Security Groups: Security groups act as virtual firewalls for your instances in the VPC. You can create and configure security groups in the VPC dashboard under "Security Groups." Specify inbound and outbound rules to control traffic access to your instances.
  • Launch Instances: With your VPC, subnets, route tables, and security groups set up, you can now launch EC2 instances within your VPC. In the EC2 dashboard, click on "Launch Instance" and follow the steps to configure and launch your instances.

What is AWS VPC used for?

The Amazon Virtual Private Cloud (VPC) is a cloud computing service offered by Amazon Web Services (AWS) that allows users to create a private, isolated section of the AWS cloud where they can launch and run their own resources. With AWS VPC, users can customize the network configuration, create subnets, and configure route tables and network gateways, among other features.

Features & Advantages

Benefits of AWS VPC

Isolation and Security

With AWS VPC, your cloud resources are secured within a virtual private network that is logically isolated from other networks. It offers advanced security features such as security groups and network access control lists to control inbound and outbound traffic.

Full Control

AWS VPC gives you complete control over your virtual networking environment, including selection of IP address range, creation of subnets, and configuration of route tables and network gateways.


AWS VPC is seamlessly integrated with a variety of AWS services, like EC2 for computing resources and RDS for database services, allowing these services to securely operate inside the VPC.


AWS VPC doesn't charge for creating and using a VPC itself. Instead, users only pay for the additional resources and services they consume within the VPC, making it a cost-effective solution for networking needs.

Advantages of AWS VPC

  1. Custom Network Configuration: AWS VPC allows you to set up a custom network topology that closely resembles a traditional network you might operate in your own data center. This gives you the flexibility to design and implement network architectures that meet specific organizational needs.
  2. Secure Connectivity Options: AWS VPC provides multiple connectivity options, such as AWS Direct Connect for a private, dedicated network connection from your premises to AWS, and AWS VPN for secure IPsec connections.
  3. Elastic IP Addresses: With AWS VPC, you can allocate Elastic IP addresses to your instances, enabling communication with the Internet. These IP addresses are static and persist until they're explicitly released.
  4. Effortless Scaling: AWS VPC allows for smooth scaling of infrastructure while maintaining control over the networking environment. You can add or remove resources as your needs change, ensuring an adaptable network that grows with your business.
  5. Advanced Networking Features: VPC offers several advanced networking features like VPC Peering for inter-VPC communication, VPC Endpoints for private connections to AWS services, and VPC Flow Logs for network traffic logging.
  6. Compliance and Governance Support: AWS VPC supports regulatory compliance objectives by providing complete control over network security, allowing you to implement secure network architectures and effectively meet regulatory and audit requirements.
  7. Reliability and High Availability: With support for creating multiple subnets within each Availability Zone, AWS VPC ensures high availability and reliability for your applications and resources, ensuring business continuity.


How much does AWS VPC cost?

The pricing for AWS VPC is based on several factors, including the resources you use within the VPC, such as instances, subnets, Elastic IP addresses, NAT gateways, and data transfer. Here are the key pricing factors for AWS VPC:

NAT Gateway Pricing

  • Price per NAT gateway-hour: $0.045
  • Price per GB data processed: $0.045
  • Data transfer charges apply to all data transferred via the NAT gateway.

IP Address Manager (IPAM) Pricing

  • Hourly price per active IP address managed by IPAM: $0.00027
  • You are charged for each active IP address assigned to resources such as EC2 instances or ENIs.

Traffic Mirroring Pricing

  • Hourly price per ENI: $0.015
  • You are charged per hour for each ENI enabled with traffic mirroring.

Reachability Analyzer Pricing

  • Price per analysis processed by VPC Reachability Analyzer: $0.10
  • You are charged each time you analyze connectivity between a given source and destination using Reachability Analyzer.

Network Access Analyzer Pricing

  • Price per ENI analyzed by Network Access Analyzer for a network assessment: $0.002
  • You are charged for the number of ENIs analyzed when running a network assessment using Network Access Analyzer.

Please note that these prices are provided as examples, and the actual charges may vary depending on the region and usage. It's always recommended to refer to AWS VPC Pricing for accurate pricing information according to your requirement.

Cost Optimization

How to optimize and reduce AWS VPC costs

Now that we have a better understanding of AWS VPC pricing let's look at how to optimize VPC costs.

  1. Right-size your VPC resources: Review and optimize the sizes of your VPC resources such as EC2 instances, NAT gateways, and VPN connections. Choose instance types and sizes that meet your workload requirements without overprovisioning.
  2. Use resource tagging: Apply consistent and meaningful tags to your VPC resources. Tags help you categorize and track your resources, enabling better cost allocation and management.
  3. Monitor and optimize data transfer: Be mindful of data transfer costs within your VPC. Minimize unnecessary data transfers between Availability Zones or across regions. Leverage AWS Direct Connect or VPN connections efficiently for data transfer to and from your VPC.

AWS VPC Cost Optimization Best Practices

  1. Utilize VPC Peering: Instead of using NAT gateways or VPN connections, consider using VPC peering for communication between VPCs within the same region. VPC peering offers cost savings and improved network performance.
  2. Monitor and optimize IP address usage: Regularly review and manage IP address allocation within your VPC. Release unutilized IP addresses to avoid unnecessary charges for IP Address Manager (IPAM).
  3. Leverage AWS Cost Explorer: Utilize the AWS Cost Explorer tool to analyze your VPC costs, identify usage patterns, and uncover potential cost-saving opportunities. Explore cost reports, forecasts, and recommendations to optimize your VPC spending.

Check out related guides

The missing piece of your cloud provider

Why waste hours tinkering with a spreadsheet when Economize can do the heavy lifting for you 💪

Let's upgrade your cloud cost optimization game!

Get Started Now