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Hardware VPN vs software VPN: The Ultimate Comparison

Understand the differences between hardware and software VPN with regards to their deployment, maintenance, costs, scalability, performance and security.

Lukas Dolnicek


Min read

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Understanding the differences between hardware and software VPN is crucial when choosing the solution that best fits your organization's needs. In this blog we will address their key distinctions in deployment, maintenance, costs, scalability, performance, and security to help you determine what type is the right choice for you.

Table of contents

Differences between software and hardware VPN

VPN deployment

VPN maintenance

Cost of VPN

VPN scalability

VPN performance

VPN security

Software VPN vs Hardware VPN: Key Takeaways

The importance of virtual private networks (VPNs) as a means of protecting sensitive business data grows constantly. According to a report by MarketsandMarkets, the global VPN market size is expected to experience higher growth (CAGR of 15,3%) compared to other cybersecurity industries and also the cybersecurity market as a whole.

Such a rapid overall growth is mainly driven by the adoption of software, and in particular cloud VPN solutions (projected CAGR of 22.5% from 2022 to 2030 according to Verified Market Research).

So if hardware and software VPNs serve the same purpose, why are software, or cloud VPNs being adopted faster? When does software VPN provide more advantages than hardware VPN? Let's check the key differences to understand this topic.

To demonstrate the differences, this article considers “software VPN” a business VPN delivered as a service (VPNaaS), particularly from the cloud of the business VPN provider.

Key terms

Hardware (on-premise) VPN

Hardware VPN is a dedicated server or other device with clearly specified ports and parameters that delivers pure VPN functionality. Such a piece of hardware is operated and maintained by a company on premises. Licensing (number of users, VPN tunnels etc.) is usually determined by the hardware.

Software VPN

A software VPN is provided as a service, no matter if self-hosted or managed (provided from the cloud). The distinction here is that you don't need to build your own infrastructure but rather utilize the infrastructure you already have or the infrastructure of a VPN provider (managed service, cloud delivery).

Differences between software and hardware VPN

Each type of VPN has its own unique set of benefits and drawbacks. Understanding the differences between software and hardware VPNs is crucial for those who want to make an informed decision about which solution is best for their needs.

VPN deployment

A hardware VPN is a physical device installed on the network, whereas a software VPN is a virtual network configuration implemented through software.

When an enterprise wants to build its own VPN infrastructure, it is usually a complex task that requires several components, such as:

  • VPN gateway - a gateway between your internal network and the internet that handles key tasks such as establishing encrypted tunnels and eventually other functions like access management (authentication and authorization). To do this, you will need a dedicated server, router, or firewall with VPN functionality.
  • Network switches to interconnect devices within your internal network.
  • Network security software such as IDS or firewall to protect private environments against common cyber threats.
  • Network monitoring software such as SNMP to ensure the availability of the dedicated infrastructure.
  • Static IP address - you will need your ISP to lease one public static IP address for each device you want to be accessible via the internet.
  • Connectivity - stable and reliable connectivity that can handle Internet traffic for both local employees and employees connected via VPN.
  • VPN client - a software to be installed on each user device in order to enable remote access to the protected environment.

All of this needs to be done for all your offices or locations, preferably in a redundant configuration. The complexity of building an on-premise hardware VPN infrastructure will vary depending on the size of your organization, its security, and performance needs.

Cloud VPN has significantly simplified the solution architecture (from the customer point of view). Businesses don't need to invest time and costs into the building and maintaining VPN infrastructure.

They just tap into the virtual network of the business VPN provider, e.g. GoodAccess, by subscribing to their service, configuring the basic settings (gateways, connections to on-premise networks, definition of systems), enabling specific security features, setting up login credentials, and inviting team members to the network by installing a client application.

VPN maintenance

Like any piece of technology, a VPN also requires maintenance to minimize downtime, prevent security incidents, and preserve reliability. Generally speaking, software VPNs are easier to maintain than hardware VPNs. They require less manual configuration and can be upgraded and reconfigured with a few clicks in the admin panel.


HW VPNs require manual reconfigurations of network settings, such as IP addresses, subnet masks, and routing tables. This can be time-consuming and complicated, especially in larger networks. Software VPNs usually come with tools that automate most of these tasks.

Maintenance and repairs

In the case of failure, hardware VPNs require replacement or repair of the broken components. This can be expensive and time-consuming, especially if the hardware is out of warranty. When using a software VPNs, there is no need to replace or repair hardware components, everything is handled by the provider.


Hardware VPNs can be difficult to scale up, especially if additional hardware components are required. Software VPNs, on the other hand, can be easily scaled up or down by adjusting network settings or adding additional licenses with a few clicks.

Upgrades and updates

Updating and upgrading hardware VPN requires a responsive engineer, which implies additional costs. In contrast, software VPN can be updated and upgraded with a mouseclick with no disruption to the network operations.

Cost of the VPN solution

When comparing the total cost of ownership for VPNs, software VPN usually comes at a fraction of the costs of hardware VPN. There are several reasons for that since building a VPN infrastructure from scratch is much more resource intensive than simply tapping into an already configured virtual infrastructure of the VPN provider.

When we dig deeper, the main reasons are:

Infrastructure costs - building a hardware VPN infrastructure on your own requires purchasing dedicated physical devices that age (typically server, but VPN functionality can also be run on a router or firewall). On the other hand, with software VPN you just tap into an already existing network that is operated by the vendor, such as GoodAccess.

Maintenance - software updates, device management, and configurations when the need to add/remove a new user or device arises can be costly and time-consuming when done with your own internal resources. By contrast, software VPN infrastructure is maintained by the vendor so there are no additional costs associated.

Technical expertise - setting up and maintaining a hardware VPN requires dedicated personnel which adds to the total costs of ownership. In the case of software VPN, you usually have someone who takes care of running the VPN in your organization, so for example, they add users and devices into the protected network via the web UI of the particular application, but they do not necessarily need to have deep IT knowledge.

VPN scalability

Cloud VPNs naturally scale better than hardware VPNs. They are easier and less expensive to scale up or down which can be particularly important for businesses with changing needs or fluctuating demand for VPN services.

When it comes to scalability, there are some significant differences between hardware VPNs and cloud VPNs.

  1. Scaling up a hardware VPN requires someone with technical expertise to manually add or remove hardware components, e.g. in situations when you need an additional gateway for a particular location.
  2. Adding more users to a hardware VPN can also be problematic, as the hardware may have limited capacity to handle additional connections.
  3. Scaling a hardware VPN is expensive as adding additional hardware components can be costly.

By contrast, software VPN:

  1. Scaling up/down a cloud VPN can be easily done with a few clicks in response to changing demands and doesn't require a deep technical knowledge. For example, additional gateways can be easily added, as can additional branches to the protected network.
  2. Adding more users to a cloud VPN is usually a straightforward process, as you can simply purchase additional licenses or subscriptions via the web UI.
  3. Cloud VPNs are generally more cost-effective to scale than hardware VPNs, as you only pay for the resources you need, and there is no upfront cost for additional hardware.

VPN performance

Hardware VPNs were historically considered to have better performance than cloud VPNs as they can fully leverage resources of a dedicated physical infrastructure. Also, cloud VPNs struggled with performance due to a range of factors such as latency of the public internet networks, bandwidth limitations, and the processing power of the cloud infrastructure.

However, in recent years, cloud VPNs have improved significantly in terms of performance due to advancements in cloud infrastructure and network virtualization. Cloud VPN providers such as GoodAccess are investing into strengthening their global infrastructure so the performance in terms of connection speed and latency is hardly observable in most cases.

Actually, cloud VPN providers can offer even better connection quality. They have their solutions hosted in data centers that run directly on backbone internet networks and their links use minimum hops between datacenters. When running a local, on-premise VPN, you are dependent on the quality of the connection provided by the ISP , which is nowhere near the quality of the connection provided by the datacenter.

VPN security

Both hardware and cloud VPNs can provide a high level of security if properly implemented and configured (e.g. proper, unbroken protocols such as IPsec, OpenVPN are in place).

Historically, hardware VPNs were perceived as more secure since managing “in house” solutions was preferred to relying on third-party security mechanisms.

Modern business cloud VPN providers invest heavily into the security of their infrastructure, they hire highly skilled personnel and use-up-to date technologies so they offer the same, or even better protection of the VPN environment.

Therefore, the choice between the two depends on other factors such as business requirements, budget, and IT resources, etc.

Software VPN vs Hardware VPN: Key Takeaways

Virtual private networks are especially crucial  in use cases such as remote access to private resources, devices and cloud assets, and enabling secure, borderless communication between two or more corporate networks.

Today, hardware, on-premise VPNs can hardly keep up with ever changing business needs, especially due to their rigidity and resource-intensiveness. Still, they remain relevant, especially in larger organizations and data centers, with rigid and very strict security measures.

Key differences between software and hardware VPN

However, software VPNs, especially those delivered from the cloud as a “VPN as a service”, have taken the lead in the industry. They better fit the dynamics of today's business environment in terms of deployment, maintenance, costs, and scalability.

Additionally, they have also come on par in areas that were previously considered strengths of hardware VPNs, particularly in performance and security.

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