Key Differences Between Proxies and VPNs

Roadrunner vs. Coyote. Superman vs. Lex Luthor. Coke vs. Pepsi. The Proxy vs. VPN battle isn't as old or widely known as other rivalries, but awareness is growing. 

Changing IP addresses and encrypting online activity helps protect sensitive data. Initial web searches may lead you to think that you can use either a proxy server or a VPN to handle both. But from a business perspective? Your better bet is to use the two together. 

Read on for a closer look at the Proxy vs VPN debate, what the main differences are, and what combining the two can do for your cybersecurity approach and online privacy.

Proxy vs VPN Difference #1: What They Are and What They Do

A proxy server is a computer system or router that acts as a relay between client and server on behalf of the user. Internet requests made by the user are routed to the proxy server first, evaluated, then forwarded to the internet. On the flip side, responses from the internet return to the proxy server before making their way to the user. The purpose of the proxy server is to mitigate threats to a network by guarding the identity of the resource server.

The most common types of proxies are:

SOCKS5 Proxies: Used for file sharing, video streaming services (e.g., Netflix), and gaming

HTTP Proxies: Used to access geo-restricted websites or in censored regions  

Transparent Proxies: These proxies block certain sites in places (e.g., workplaces, schools) with public computers

A business-grade VPN provider enables:

• A secure connection to your company's virtual private network over the public internet
• A piece of layered security that protects company and personal data
• The ability to remotely access important network resources
• Connections between your branches and global locations

Two common types of business VPN setups are: 

Remote Access: Hosted on the cloud or private network; connect users to a virtual private network from remote locations using VPN client apps installed on mobile devices

Site-to-Site: Connect two or more networks (e.g., a corporate network and a branch office network); intranet VPNs connect remote and main offices, extranet VPNs connect partners or customers with the main office network.

(Note: OpenVPN products support connections through one or more proxies.)

Proxy vs VPN Difference #2: How They Work

How do proxies work? Say you want to buy something from an online store. You enter the store’s URL and your Internet Service Provider (ISP) submits the request then connects you to the store’s site. Your IP address — the equivalent of a digital mailing address — is visible if you aren’t using a proxy. If you are using a proxy, however, the proxy intercepts your request and masks your real IP address with an alternative IP address you selected when setting up the proxy server. 

Proxies are easily found with an online search (e.g., “free proxy”, “proxy list”) and don’t require an ISP change.

A VPN connection secures your internet connection by routing all of your network traffic through an encrypted tunnel via the VPN. Routing the network traffic disguises your IP address and hides your location. The only thing an outsider can see about your activity -- even on public wifi -- is that you’re connected to a VPN server.

Proxy vs VPN Difference #3: What They Conceal

To put it simply:

• VPNs: Encrypt IP addresses and all internet activity 
• Proxies: Conceal IP addresses, do not encrypt user activity

(Note: Proxies can be set up to encrypt traffic. The process requires a self-signed cert and is more complex than using a VPN.)

Proxy vs VPN Difference #4: Cost(s)

As of this writing, a Google search for “free proxies” returned “About 21,100,000 results” (and did it in 0.55 seconds). But here’s the reality: few things in this world worth having are free. Those free proxy servers? Many of them offset free proxy server costs by selling user data. If you’re trying to conceal your IP address, why would you want the proxy server provider to sell the data you’re trying to keep private?

Yes, there are free VPNs, too, but they tend to limit daily data use as well as the number of servers available. Enterprise-grade VPNs:

1. Are cost-effective
2. Support an unlimited number of users
3. Offer a variety of globally distributed servers to access
4. Have crystal clear logging policies. They don’t log, share, or sell user data

Proxy vs VPN Difference #5: Reliability

VPNs, especially paid, business-grade VPNs, consistently outperform proxy services in terms of reliability. Private proxies are more reliable than shared ones and usually offer unlimited bandwidth. Free proxies are especially unreliable due to the volume of traffic passing through them and data caps.

A VPN built for business traffic can provide private network access from multiple VPN regions without affecting browsing speed. This helps ensure access is maintained even if one of the connectors running on the private network goes down.

Proxy vs VPN Difference #6: Spam and Pop-ups

Again, you get what you pay for. There are different types of proxy servers, and with a free proxy server you’re more likely to get spammy banners and pop-ups. This happens because a proxy server assigns a session when you’re online. Then it packs that session with ad links in an attempt to accrue revenue. Proxy providers also have the potential to infuse your session with viruses and spam that you may unknowingly download. 

A VPN service with content filtering functionality can block phishing sites or web pages. It's a step ahead of a firewall. Phishing sites and pages are often sources of ransomware, malware, and viruses. Need to mitigate Domain Name System hijacking? Content filtering helps thwart:

• Middleman attacks
• Cache poisoning
• Rogue DNS server 
• Router vulnerabilities exploitation

In Proxy vs VPN, the Winner is: Both

The real winner is you, the business user. 

VPNs and proxies are complementary, important pieces of a multi-layered approach that enables:

• Access control
• Increased productivity
• Reduced attack surface