OCI networking costs: VCN peering vs FastConnect for high-throughput ERP workloads

Cloud Platforms Oracle Cloud
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1

Our organization is architecting a multi-region OCI deployment for our ERP system with heavy inter-region data synchronization requirements. We’re trying to decide between VCN peering and FastConnect for connecting our primary region (Phoenix) to our DR region (Ashburn).

The ERP workload generates approximately 2-3TB of data transfer per day between regions during normal operations, with spikes up to 5TB during month-end processing. We need low latency (under 50ms) and high reliability.

From what I understand, VCN peering is simpler to set up and included in the base pricing, while FastConnect requires additional circuits but might offer better performance and dedicated bandwidth. What are the real-world cost implications at this scale? Has anyone done a detailed comparison for high-throughput enterprise workloads? Particularly interested in understanding the hidden costs and performance characteristics that might not be obvious from the documentation.

2

Let me provide a comprehensive analysis of VCN peering versus FastConnect for your high-throughput ERP workload scenario, covering all three key areas: VCN peering characteristics, FastConnect benefits, and ERP-specific networking considerations.

VCN Peering Deep Dive:

Architecture & Performance:

  • Remote VCN peering connects VCNs across regions using Oracle’s backbone network
  • Latency Phoenix-Ashburn: typically 60-75ms (physical distance ~2,000 miles)
  • Bandwidth: shared with other OCI traffic, no guaranteed throughput
  • Best effort QoS - can experience congestion during peak usage

Cost Structure:

  • No setup fees or port charges
  • Pay-per-GB for inter-region data transfer
  • Current OCI pricing (approximate): $0.08-0.10 per GB for cross-region transfer
  • Your volumes: 75TB/month = 76,800GB × $0.085 = ~$6,500/month
  • Month-end spikes: 150TB = ~$12,750/month
  • Annual cost (assuming average): ~$78,000-90,000

Advantages:

  • Simple setup through OCI Console (15-30 minutes)
  • No physical infrastructure requirements
  • Flexible - easy to add/remove peering connections
  • Good for variable workloads with unpredictable volumes

Limitations for Your Use Case:

  • No bandwidth guarantees during ERP month-end processing
  • Latency exceeds your 50ms requirement
  • Potential congestion during peak OCI usage periods
  • No SLA on network performance
  • Costs scale linearly with volume (expensive at high throughput)

FastConnect Comprehensive Analysis:

Architecture & Performance:

  • Dedicated private connection between your networks and OCI
  • Multiple topology options: colocation, network provider, third-party exchange
  • Port speeds: 1Gbps, 10Gbps, or 100Gbps
  • Latency: 35-45ms Phoenix-Ashburn with optimized routing via major carriers
  • Dedicated bandwidth with guaranteed throughput
  • Enterprise SLA with 99.9% uptime commitment

Cost Structure (10Gbps example):

  • Port charge: ~$3,500/month per location (Phoenix + Ashburn = $7,000/month)
  • No per-GB data transfer charges for FastConnect traffic
  • Cross-connect fees: $100-500/month per location (colocation provider fees)
  • One-time setup: $500-2,000 (LOA processing, circuit provisioning)
  • Annual cost: ~$90,000 (port fees + cross-connects + setup)

Break-Even Analysis: At 75TB monthly average:

  • VCN peering: ~$6,500/month = $78,000/year
  • FastConnect (10Gbps): ~$7,500/month = $90,000/year
  • Break-even: ~85TB/month

With your month-end spikes to 150TB, FastConnect becomes significantly more cost-effective:

  • VCN peering spike months: $12,750/month
  • FastConnect: flat $7,500/month
  • Savings during spike months: $5,250/month

ERP Workload Networking Considerations:

Performance Requirements: ERP systems have specific network characteristics:

  • Transaction processing: requires low latency (<50ms ideal)
  • Batch synchronization: high throughput more important than latency
  • Real-time reporting: consistent latency critical for user experience
  • DR failover: network must support rapid cutover with minimal disruption

FastConnect Advantages for ERP:

  1. Predictable Performance:

    • Dedicated bandwidth ensures month-end processing doesn’t slow down
    • No “noisy neighbor” issues affecting critical ERP transactions
    • Consistent latency for real-time integration scenarios

  2. SLA Protection:

    • 99.9% uptime SLA provides business continuity assurance
    • Financial credits if SLA breached
    • Critical for production ERP with strict uptime requirements

  3. Security:

    • Traffic never traverses public internet
    • Dedicated circuit reduces attack surface
    • Easier compliance for regulated industries (HIPAA, PCI-DSS)

  4. Routing Optimization:

    • Can implement BGP routing policies
    • Active-active or active-passive configurations
    • Traffic engineering for different ERP components

Architectural Recommendations:

Option 1: Pure FastConnect (Recommended for Your Volumes)

  • Deploy 10Gbps FastConnect in both regions
  • Configure BGP with route preferences for ERP traffic
  • Implement QoS policies prioritizing real-time transactions
  • Use remaining bandwidth for batch/backup operations
  • Cost: ~$90K/year with unlimited data transfer
  • Best latency: 35-45ms achievable

Option 2: Hybrid Approach (Cost-Optimized)

  • FastConnect (5Gbps) for critical ERP transactions: ~$5,000/month
  • VCN peering for bulk data sync and backups: ~$2,000/month (reduced volume)
  • Total: ~$84K/year
  • Latency: 35-45ms for critical traffic
  • Requires traffic classification and routing policies

Option 3: Tiered FastConnect (Scalable)

  • Start with 5Gbps FastConnect: ~$5,000/month
  • Upgrade to 10Gbps during month-end processing
  • Use VCN peering as backup path
  • Most complex to manage but optimizes cost-performance

Implementation Considerations:

For FastConnect Deployment:

  1. Choose colocation provider (Equinix, Megaport, etc.)
  2. Order cross-connects in both Phoenix and Ashburn
  3. Configure BGP with Oracle (AS 31898)
  4. Implement routing policies for ERP traffic prioritization
  5. Test failover scenarios before production cutover
  6. Timeline: 4-8 weeks from order to production

Network Design Best Practices:

  • Use separate VCNs for production and DR
  • Implement route tables with specific routes for ERP subnets
  • Configure Network Security Groups for ERP application tiers
  • Enable VCN flow logs for traffic analysis
  • Set up OCI monitoring for network metrics
  • Document runbooks for network failover procedures

Specific Recommendation for Your Scenario:

Given your requirements:

  • 2-3TB daily (75TB monthly average)
  • 5TB daily spikes (150TB monthly during month-end)
  • <50ms latency requirement
  • High-reliability ERP workload
  • Multi-region DR architecture

I recommend: 10Gbps FastConnect in both regions

Rationale:

  1. Cost-effective at your volumes ($90K vs $78K for VCN peering, but with spike protection)
  2. Meets latency requirement (35-45ms achievable vs 60-75ms with peering)
  3. Provides bandwidth guarantee during critical month-end processing
  4. Includes enterprise SLA for production ERP workload
  5. Unlimited data transfer eliminates cost spikes
  6. Dedicated circuit improves security posture
  7. Supports growth without cost increases

Migration Path:

  1. Month 1-2: Order and provision FastConnect circuits
  2. Month 2: Configure and test in parallel with existing VCN peering
  3. Month 3: Migrate non-critical workloads to FastConnect
  4. Month 4: Cutover critical ERP traffic during maintenance window
  5. Month 5: Decommission VCN peering, optimize routing policies

The upfront investment in FastConnect will pay dividends in predictable costs, better performance, and reduced risk for your mission-critical ERP workload.

3

For those data volumes, you definitely need to look at the actual data transfer pricing. VCN peering between regions isn’t free - you pay for cross-region data egress which can add up quickly. At 2-3TB daily, that’s 60-90TB monthly. Check the OCI pricing page for inter-region transfer rates. FastConnect can actually be more cost-effective at high volumes because you get predictable port costs rather than per-GB charges.

4

From an ERP perspective, I’d lean toward FastConnect for production workloads. We’ve had issues with VCN peering where occasional network congestion caused ERP sync delays during peak times. FastConnect’s dedicated bandwidth eliminated those issues. Also consider your DR strategy - if you need to fail over to Ashburn, you want guaranteed network performance. The cost difference is meaningful but so is the risk of ERP downtime or data sync failures.

5

I ran the numbers for a client with similar volumes. At 75TB monthly transfer, VCN peering costs about $6,000-7,500/month just for data transfer (depending on exact pricing tier). A 10Gbps FastConnect port is around $3,500/month flat rate with no per-GB charges. The break-even point is somewhere around 40-50TB monthly. Above that, FastConnect becomes significantly cheaper. But don’t forget the one-time setup costs and the cross-connect fees from your colocation provider.

6

We run a similar setup. One thing to consider: VCN peering latency between Phoenix and Ashburn is typically 60-70ms due to physical distance, which might not meet your 50ms requirement. FastConnect with a private backbone provider can sometimes offer better latency through optimized routing. Also, FastConnect gives you bandwidth guarantees - with VCN peering you’re sharing bandwidth with other OCI traffic. For mission-critical ERP, that predictability matters.

7

Have you considered a hybrid approach? Use VCN peering for non-critical background sync and implement FastConnect for critical real-time ERP transactions. We segment our traffic with different VCNs based on priority. The bulk data transfers (like historical data sync, backups) go over VCN peering during off-peak hours, while transactional ERP traffic uses FastConnect. This optimizes both cost and performance. You can also use traffic shaping policies to prioritize ERP traffic over the FastConnect link.