VNet peering is a mechanism that seamlessly connects two VNets in the same region through the Azure backbone infrastructure. Once peered, the VNets appear as one for connectivity purposes, just like routing traffic between virtual machines (VMs) that are created in the same VNet. The VMs that reside in the peered VNets communicate with each other using private IP addresses. VNet peering is the easiest and most effective way to connect two VNets together.

Azure supports the following two different types of peering:

• VNet peering: This is used for connecting VNets in the same Azure region.
• Global VNet peering: This is used for connecting VNets across different Azure regions.

The network traffic between peered VNets is private. The traffic is kept on the Microsoft backbone network completely, so there is no need to use any additional gateways or to route traffic over the public internet. There is also no encryption required in the communication between the peered VNets. It uses a low-latency, high-bandwidth connection between the resources in the different virtual networks.

You can use VNet peering to connect VNets that are created through the resource manager and the classic deployment model, and it gives you the ability to transfer data across Azure regions and subscriptions.