Yes, the Cloud to Cloud Network does spin up instances or virtual servers. These instances run as VPN appliances running the IPsec encryption and authentication protocol. Once the instances are spun up, they auto discover the other VPN appliances running in other cloud regions and automatically deploy IPsec VPN tunnels to them.
By default the Cloud to Cloud Network spins up 2 VPN instances per cloud region. Instances are placed in separate availability zones and are arranged in an active/passive setup. Whenever an instance fails or an availability zone goes down the VPN tunnels seamlessly failover to the stand-by instance in the other availability zone. Users can choose to spin up up-to 5 instances per cloud region.
Hybrid architectures with private cloud or on-premise data centers, need to deploy a Docker container running the software.
The default instance type is t2.medium, which can handle up-to 250 Mbit/s of bandwidth. The corresponding VM on Azure is Standard_A1_v2, which can also support up-to 250 Mbit/s. Other instance types are also supported including t2.nano, m3.medium, m4.large, m4.xlarge, m4.2xlarge as well as other corresponding virtual servers on other cloud providers.
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