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Is this how to calculate the cost for VNET peering and VNET-to-VNET VPN connection?

Tan-9136 190 Reputation points
2025-08-21T21:28:09.8733333+00:00

Hi everyone,

I am trying to understand the difference cost between doing VNET peering vs VNET-to-VNET VPN connection.

Let's take this scenario:
VNET 1 is in US South Central Region
VNET 2 is in US East Region.
VNET 1's Resource in Zone 1 sends data out 50 TiB/month to VNET 2's Resource in Zone 1

Cost calculation for VNET Peering model:
Facts:

  • VNET peering only calculates Ingress/Engress traffic.
  • Global VNET Peering table cost will be used since they are cross regions.
  • Cost of Inbound data transfer for Zone 1 is $0.035/GB.
  • Cost of Outbound data transfer for Zone 2 is $0.035/GB.

Outbound cost for VNET 1 to VNET 2 is 50 * 1024 * 0.035 = $1792
Inbound cost for VNET 2 from VNET 1 is 50 * 1024 * 0.035 = $1792
Total monthly cost is: $3584

Cost calculation for VNET-to-VNET VPN connection model:
Facts:

  • VNET-to-VNET VPN only calculates VPN Gateway + Egress traffic.
  • Assume we are using VpnGw1AZ. Its cost is $153.3/month
  • Cost of outbound Inter-virtual for Zone 1 is $0.035/GB.

Outbound cost for VNET 1 to VNET 2 is 50 * 1024 * 0.035 = $1792
Total monthly cost is $153.3 + $1792 = $1945.3

So the conclusion is VNET-to-VNET VPN Connection model is significantly cheaper.
Is my understanding correct?

Azure Virtual Network
Azure Virtual Network
An Azure networking service that is used to provision private networks and optionally to connect to on-premises datacenters.
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Accepted answer
  1. Michele Ariis 4,505 Reputation points MVP
    2025-08-22T06:22:41.5633333+00:00

    Hi, mostly right, but two key fixes:

    Peering (cross-region, Zone 1): you pay both ends (egress at source + ingress at dest). For 50 TiB one-way:

    Cost ≈ 2 × 0.035 $/GB × 50 TiB ≈ $3,584 (your math is fine).

    VNet-to-VNet VPN (S2S): you must run a gateway in each VNet, so count two gateways, not one. Data transfer is billed once (egress only) at 0.035 $/GB for Zone 1. For 50 TiB one-way using VpnGw1AZ:

    Data: $1,792 + Gateways: 2 × $153.3 = $306.6 → Total ≈ $2,099 (still cheaper than peering).

    Rule of thumb

    Break-even (one-way volume, Zone 1, VpnGw1AZ): around 8.6 TiB/month; above that, VPN < Peering on cost; below it, Peering is cheaper because it has no fixed gateway cost.

    But Peering wins on performance/ops: higher throughput, lower latency, no encryption overhead, simpler HA.

    If your 50 TiB is two-way, multiply the data part accordingly for both models (VPN still pays only egress at each side; peering still bills both ends per direction).

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