Understanding AWS VPC Peering vs. Transit Gateway - When to Use Which?

When designing a multi-VPC architecture on AWS, one of the critical decisions you’ll face is how to connect your VPCs. AWS offers two primary options: VPC Peering and Transit Gateway. Both have their strengths and use cases, but knowing when to use each can be the difference between a scalable, cost-effective solution and one that becomes difficult to manage. In this post, we’ll dive into the differences between AWS VPC Peering and Transit Gateway and provide guidance on when to use each.

What is VPC Peering?

VPC Peering is a networking connection between two VPCs that allows you to route traffic between them privately. It’s a simple and effective way to connect VPCs within the same region or across different regions. With VPC Peering, traffic between VPCs stays within the AWS network and does not traverse the public internet, which helps maintain security and performance.

Key Features of VPC Peering:

• Direct Connections: VPC Peering establishes a direct, one-to-one network connection between two VPCs.
• Simple Setup: Setting up a VPC Peering connection is straightforward and requires minimal configuration.
• Low Latency: Since traffic doesn’t leave the AWS network, you can expect low-latency communication between peered VPCs.
• Cost-Effective for Small Scale: There are no additional data transfer charges between peered VPCs within the same region, making it a cost-effective solution for small-scale architectures.

Limitations of VPC Peering:

• No Transitive Routing: VPC Peering does not support transitive routing. This means if you have three VPCs (A, B, and C), peering A to B and B to C does not allow A to communicate with C.
• Manual Management: As the number of VPCs increases, managing individual peering connections can become complex and cumbersome.
• Regional Considerations: While inter-region peering is possible, it comes with additional costs and potential latency issues.

What is AWS Transit Gateway?

AWS Transit Gateway is a service that enables you to connect multiple VPCs and on-premises networks through a central hub. It acts as a cloud router, simplifying your network architecture by allowing you to manage all your connections through a single gateway. Transit Gateway supports transitive routing, which means VPCs and on-premises networks connected to the gateway can communicate with each other seamlessly.

Key Features of AWS Transit Gateway:

• Centralized Hub: Transit Gateway allows you to connect multiple VPCs and on-premises networks to a single gateway, simplifying management and reducing the need for complex peering arrangements.
• Scalability: As your network grows, Transit Gateway can scale with your needs, supporting thousands of VPCs and connections.
• Transitive Routing: With Transit Gateway, any VPC connected to the gateway can communicate with any other connected VPC or on-premises network, enabling more complex and scalable architectures.
• Multi-Region and Multi-Account Support: Transit Gateway can extend across multiple AWS regions and accounts, providing a unified network solution for large-scale and globally distributed environments.

Limitations of AWS Transit Gateway:

• Higher Costs: Transit Gateway introduces additional costs, including per-hour charges for each attached VPC and data transfer fees.
• Complexity: While Transit Gateway simplifies management in large environments, it introduces more complexity compared to VPC Peering in smaller setups.
• Latency Considerations: Transit Gateway adds an extra hop in the network path, which could introduce latency compared to direct VPC Peering.

When to Use VPC Peering?

VPC Peering is an excellent choice for:

• Small-Scale Architectures: If you only need to connect a few VPCs, especially within the same region, VPC Peering offers a simple and cost-effective solution.
• Low Latency Requirements: For workloads requiring the lowest possible latency between VPCs, direct peering may be preferable.
• One-to-One Connections: When you only need to establish a direct connection between two VPCs without the need for transitive routing.

When to Use AWS Transit Gateway?

AWS Transit Gateway is ideal for:

• Large-Scale Architectures: If you have multiple VPCs and on-premises networks that need to communicate with each other, Transit Gateway simplifies management and scales with your needs.
• Transitive Routing Requirements: If you require complex routing across multiple VPCs and networks, Transit Gateway’s transitive routing capabilities are essential.
• Multi-Region and Multi-Account Setups: For organizations operating across multiple AWS regions or accounts, Transit Gateway offers a centralized and scalable networking solution.

Conclusion

Both VPC Peering and AWS Transit Gateway have their place in AWS network architectures. VPC Peering is a great option for smaller, simpler setups, where direct, low-latency connections are needed. In contrast, AWS Transit Gateway excels in large, complex environments that require scalable, transitive routing across multiple VPCs and networks. By understanding the strengths and limitations of each, you can make an informed decision that best fits your networking needs.