As businesses continue to migrate infrastructure to the cloud, networking concepts that were once strictly physical like VLANs and subnets have evolved. While these terms are often used interchangeably, especially in cloud native discussions, they serve distinct purposes.
This guide will clarify the differences between VLANs and subnets, highlight how they’re implemented in cloud environments like Azure and AWS, and explain how each plays a role in designing secure, scalable, and logically segmented cloud networks. Understanding these distinctions is essential for any cloud engineering initiative.
Quick Definitions
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VLAN (Virtual Local Area Network): A method of logically segmenting a Layer 2 network without requiring separate physical hardware.
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Subnet (Subnetwork): A Layer 3 IP level segmentation technique used to divide a larger IP address space into smaller, routable units.
In traditional on-prem environments, VLANs and subnets often go hand in hand. In the cloud, however, their implementations differ significantly, especially since cloud providers do not expose Layer 2 infrastructure to customers.
Core Conceptual Differences
How VLANs Work (Traditionally)
In an on premises network, a VLAN allows you to create logically separate groups of devices on the same physical switch. This reduces broadcast traffic and isolates traffic between departments (e.g., accounting and sales). VLANs are enforced using tags (802.1Q) that tell switches how to route frames.
In the cloud, you do not manage Layer 2 directly, so traditional VLAN tagging is not available. Instead, similar functionality is achieved through network security groups, routing tables, and virtual network peering.
How Subnets Work (Traditionally and in the Cloud)
A subnet divides a larger IP network into smaller, addressable segments. Each subnet has its own IP range and typically acts as a separate routing boundary. This is true both on prem and in the cloud.
In the cloud, subnets are the primary method of network segmentation. Whether you’re using Azure, AWS, or GCP, you create subnets within a virtual network (VNet or VPC) to organize resources and apply policies.
For example, in Azure:
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A VNet contains multiple subnets.
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Each subnet is associated with routing tables and NSGs.
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Traffic between subnets is routed at Layer 3 and can be controlled using rules.
VLANs in the Cloud: Are They Still Relevant?
Most cloud providers abstract away VLANs completely. Instead of configuring VLAN IDs and switches, you use constructs like:
These constructs mimic VLAN isolation behavior by allowing or denying traffic between subnetworks, even within the same VNet or VPC.
Some hybrid cloud or private cloud deployments (e.g., using Azure Stack HCI or VMware Cloud) still use VLANs to segment traffic between on prem and cloud-connected systems, but this is less common in fully managed, public cloud deployments.
When to Use Subnets vs VLAN-Like Controls in the Cloud
Use Subnets When You Need:
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Clear separation of services (e.g., database subnet, application subnet)
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Different routing or NAT rules
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Deployment of services across availability zones
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Public vs private resource separation
Use VLAN-Like Controls When You Need:
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Port level traffic isolation
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Microsegmentation between workloads in the same subnet
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Enforcement of security policies based on source/destination
Security and Compliance Considerations
Proper network segmentation is a cornerstone of security and compliance in the cloud. Here are key considerations:
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Subnets allow fine grained control of traffic flow using route tables and NSGs.
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Application-level segmentation using NSGs or Azure Firewall is critical in the absence of VLANs.
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Zero Trust Architecture often involves multiple subnet segments with limited interconnectivity even if those segments reside within the same VNet.
Cloud Provider Comparison: Network Segmentation Across Azure, AWS, and GCP
Each major cloud provider implements network segmentation differently. The table below compares how Azure, AWS, and GCP handle the core networking constructs that replace traditional VLANs.
| Feature | Azure | AWS | GCP |
|---|---|---|---|
| Virtual Network | VNet | VPC | VPC |
| Subnet Scope | Regional (spans all AZs in a region) | Availability Zone-specific | Regional (spans all zones) |
| Traffic Filtering | Network Security Groups (NSGs) | Security Groups + NACLs | Firewall Rules |
| Layer 2 Isolation | Not exposed | Not exposed | Not exposed |
| Default Inter-Subnet Routing | Allowed (controlled via NSGs/UDRs) | Allowed (controlled via SGs/NACLs) | Allowed (controlled via Firewall Rules) |
| Private Connectivity | ExpressRoute | Direct Connect | Cloud Interconnect |
| VLAN Support | Only via ExpressRoute (802.1Q tagging) | Only via Direct Connect (802.1Q tagging) | Only via Cloud Interconnect (VLAN attachments) |
| Microsegmentation | Azure Firewall, NSGs per NIC | Security Groups per ENI | Firewall Rules with target tags |
| Network Peering | VNet Peering (non-transitive) | VPC Peering (non-transitive) | VPC Network Peering (non-transitive) |
| Transit/Hub Model | Azure Virtual WAN, Hub VNet | Transit Gateway | Network Connectivity Center |
Azure VNets vs AWS VPCs: Key Architectural Differences
While Azure VNets and AWS VPCs serve the same fundamental purpose, their implementations differ in ways that affect network design decisions. In Azure, subnets within a VNet are regional constructs that span all availability zones, meaning a single subnet can host resources in any zone within the region. In AWS, each subnet is tied to a single Availability Zone, so achieving cross-zone redundancy requires creating separate subnets in each AZ.
This architectural difference has practical implications. In Azure, you might create a single “application” subnet that serves resources across all zones. In AWS, you need to create separate subnets per AZ (for example, app-subnet-us-east-1a, app-subnet-us-east-1b) and use load balancers to distribute traffic across them. AWS also uses two layers of traffic filtering—Security Groups at the instance level and Network ACLs at the subnet level—whereas Azure consolidates this into NSGs that can be applied to either individual NICs or entire subnets.
For organizations running workloads across both providers, understanding these differences is critical when migrating to Azure cloud services or designing multi-cloud architectures.
When VLANs Still Matter in Hybrid Environments
Although VLANs are abstracted away in public cloud, they remain relevant in hybrid scenarios where on-premises networks connect to cloud resources. Both Azure ExpressRoute and AWS Direct Connect use 802.1Q VLAN tagging on the physical connection between your data center and the cloud provider’s edge. In these configurations, you assign specific VLAN IDs to separate private peering traffic from Microsoft peering (in Azure) or from different virtual interfaces (in AWS).
This means your network team may still need to manage VLAN configurations on your on-premises switches and routers, even though the cloud side of the connection uses subnets exclusively. A common migration pattern involves mapping each on-premises VLAN to a corresponding cloud subnet, applying equivalent security controls through NSGs or Security Groups, and configuring route tables to direct traffic between the two environments.
Troubleshooting Common Network Segmentation Issues
When deploying or managing segmented cloud networks, several issues arise frequently. Below are the most common problems and how to resolve them.
Resources in Different Subnets Cannot Communicate
If two resources within the same VNet or VPC cannot reach each other, check the following:
- NSG or Security Group rules: Ensure inbound and outbound rules allow traffic between the source and destination subnets. In Azure, use the NSG flow logs or the IP flow verify tool in Network Watcher to diagnose blocked traffic.
- Route tables: Custom routes may be directing traffic to a network virtual appliance (NVA) or firewall that is dropping the packets. Review User Defined Routes (UDRs) in Azure or custom route tables in AWS.
- Subnet delegation: In Azure, some subnets delegated to specific services (such as Azure SQL Managed Instance or Azure App Service) have restrictions on what other resources can be deployed or communicate through them.
# Azure: Check effective routes for a NIC
Get-AzEffectiveRouteTable -NetworkInterfaceName "myNIC" -ResourceGroupName "myRG"
# Azure: Verify NSG rules affecting a NIC
Get-AzEffectiveNetworkSecurityGroup -NetworkInterfaceName "myNIC" -ResourceGroupName "myRG"Traffic Between Peered Networks Is Failing
VNet peering and VPC peering are non-transitive by default. If VNet A is peered with VNet B, and VNet B is peered with VNet C, traffic from A cannot reach C through B unless you explicitly configure a hub-and-spoke topology with route forwarding.
In Azure, verify that Allow forwarded traffic and Allow gateway transit are enabled on the peering connection if traffic needs to flow through a central hub. In AWS, check that route table entries in each VPC point to the peering connection for the correct CIDR ranges. For organizations with complex multi-network topologies, tools like Azure Virtual WAN or AWS Transit Gateway can simplify routing.
DNS Resolution Failures Across Subnets
Network segmentation can inadvertently break DNS resolution if resources in different subnets rely on different DNS servers. In Azure, ensure that VNet DNS settings are configured consistently, and consider using Azure Private DNS Zones for name resolution across peered networks. In AWS, enable DNS resolution and DNS hostnames on the VPC, and use Route 53 Resolver for cross-VPC name resolution.
Performance Degradation After Segmentation
Introducing additional subnets and security rules can add latency if traffic is being routed through network virtual appliances or firewalls for inspection. Monitor network throughput and latency using Azure Network Watcher or AWS VPC Flow Logs. If performance is unacceptable, consider using service endpoints or private endpoints to keep traffic on the cloud provider’s backbone network instead of routing it through inspection appliances. For guidance on reducing unnecessary cloud spending while maintaining performance, see our guide on cloud cost optimization.
Summary: What You Should Know
Frequently Asked Questions
What is the difference between a VLAN and a subnet in cloud networking?
A VLAN operates at Layer 2 (data link) and logically segments devices on the same physical network, while a subnet operates at Layer 3 (network) and divides an IP address space into smaller routable segments. In the cloud, providers abstract away Layer 2 entirely, so subnets within a VNet or VPC are the primary segmentation method. VLAN-like isolation is achieved through security groups and firewall rules rather than traditional VLAN tagging.
Do AWS and Azure support VLANs?
AWS and Azure do not expose traditional VLAN tagging to customers within their public cloud environments. Instead, they offer subnets within VPCs (AWS) and VNets (Azure) for network segmentation, along with security groups and network security groups to control traffic flow. VLANs may still be relevant in hybrid scenarios that use dedicated connections like AWS Direct Connect or Azure ExpressRoute.
How do I segment my cloud network without VLANs?
In the cloud, you segment networks by creating multiple subnets within a virtual network and applying security controls to each. Use network security groups (NSGs) or security groups to restrict traffic between subnets, and configure route tables to control how traffic flows. For microsegmentation within a subnet, consider application-level firewalls such as Azure Firewall or AWS Network Firewall.
Should I use VLANs or subnets when migrating to the cloud?
For most cloud migrations, subnets are the correct approach since cloud providers are built around Layer 3 segmentation. If you are running a hybrid environment that bridges on-premises infrastructure with the cloud, you may still use VLANs on the on-prem side while mapping them to subnets and security groups in the cloud. A well-planned migration will translate your existing VLAN-based segmentation strategy into cloud-native subnet and security group configurations.
What is the difference between Azure VNet and AWS VPC?
Both serve as the foundational virtual network construct in their respective clouds, but they differ in subnet scoping. Azure VNet subnets are regional and span all availability zones, while AWS VPC subnets are scoped to a single Availability Zone. Azure uses Network Security Groups for traffic filtering, while AWS uses both Security Groups and Network ACLs. Both support peering, private connectivity (ExpressRoute and Direct Connect), and hub-and-spoke topologies.
How do I troubleshoot connectivity between subnets in Azure?
Start by checking the NSG rules applied to both the source and destination subnets and NICs. Use Azure Network Watcher’s IP flow verify tool to determine whether traffic is being allowed or blocked. Review route tables for User Defined Routes that may be sending traffic to a firewall or virtual appliance. If peered VNets are involved, confirm that forwarded traffic and gateway transit settings are configured correctly on the peering connections.
How Exodata Can Help
At Exodata, we specialize in cloud network architecture and managed IT services for organizations modernizing their infrastructure. We help small and mid sized businesses:
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Design cloud-native network topologies using VNets and subnets
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Configure secure connectivity across hybrid or multi cloud environments
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Implement access control using NSGs, firewalls, and zero trust principles
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Replace legacy VLAN strategies with cloud-ready segmentation
Whether you’re starting from scratch or migrating from a physical data center, we ensure your cloud network is secure, performant, and maintainable.
Get your cloud network architecture right from the start. Exodata helps businesses design secure, scalable networks that replace legacy VLAN strategies with modern cloud-native segmentation. Contact us to discuss your cloud networking needs with our engineering team.