When building cloud architectures on AWS, network connectivity is a critical factor. Two popular options for interconnecting Amazon Virtual Private Clouds (VPCs) are VPC Transit Gateway and VPC Peering. While both provide a mechanism for enabling communication between VPCs, they differ significantly in cost structure, scalability, and use cases.
In this blog, we’ll break down the costs associated with each solution and compare them to help you choose the right option for your needs.
What is a VPC Transit Gateway?
A VPC Transit Gateway is a fully managed service that simplifies network architectures by acting as a central hub for connecting multiple VPCs, on-premises networks, and even other AWS accounts. This hub-and-spoke model reduces the complexity of managing multiple point-to-point connections.
Cost Components of VPC Transit Gateway:
- Attachment Fee:
- Each VPC or on-premises network attached to the Transit Gateway incurs a fee.
- Example: $0.05 per hour per attachment in the US East (N. Virginia) Region.
- Data Transfer Charges:
- Data moving between VPCs or between a VPC and an on-premises network incurs a per-GB cost.
- Example: $0.02 per GB for data transferred via the Transit Gateway.
What is VPC Peering?
VPC Peering creates a direct, point-to-point network connection between two VPCs. It does not rely on a central hub, making it simpler but less scalable for larger architectures.
Cost Components of VPC Peering:
- Data Transfer Charges:
- AWS charges for data transferred between VPCs over a peering connection.
- Example: $0.01 per GB for data transfer within the same region (intra-region).
- No Hourly Fees:
- Unlike Transit Gateway, there is no hourly fee for maintaining the peering connection.
Cost Comparison: VPC Transit Gateway vs. VPC Peering
Here’s a side-by-side comparison to illustrate how costs differ:
| Cost Factor | VPC Transit Gateway | VPC Peering |
| Hourly Fees | $0.05 per attachment per hour | None |
| Data Transfer (Intra-region) | $0.02 per GB | $0.01 per GB |
| Data Transfer (Cross-region) | $0.02 – $0.04 per GB (varies by region) | $0.02 – $0.04 per GB (varies by region) |
| Scalability | High (centralized hub) | Moderate (point-to-point connections) |
| Management Overhead | Low (centralized management) | High (managing multiple connections) |
Choosing Between VPC Transit Gateway and VPC Peering
Your choice depends on several factors, including the size of your network, anticipated data transfer volumes, and your need for scalability.
When to Choose VPC Transit Gateway:
- Large, Complex Architectures: Ideal if you’re connecting multiple VPCs or accounts.
- Centralized Management: Reduces administrative burden by consolidating connections into a single hub.
- Inter-Region Connectivity: Facilitates seamless data transfer between regions.
When to Choose VPC Peering:
- Simple Architectures: Best for direct connectivity between two VPCs.
- Cost Sensitivity: More cost-effective for low data volumes or infrequent communication.
- Low Overhead: Works well if you have only a few connections to manage.
Example Use Cases
- Scenario 1: A Startup with Minimal Workloads A startup with two VPCs in the same region can save costs by using VPC Peering. It avoids the hourly attachment fees and pays only $0.01 per GB for data transfer.
- Scenario 2: A Multi-Region Enterprise Network An enterprise with multiple VPCs across regions benefits from the scalability and centralized management of a VPC Transit Gateway. Despite the higher costs, the reduced operational complexity justifies the investment.
Key Takeaways
- Cost Efficiency: VPC Peering is cheaper for smaller networks, while Transit Gateway offers better value for complex architectures.
- Scalability: Transit Gateway is the clear winner when connecting multiple VPCs and accounts.
- Operational Simplicity: While Transit Gateway incurs higher costs, it significantly reduces network management complexity.
