Yes, the IPsec VPN solution spins up AWS instances, which run as VPN appliances, with our proprietary VPN software.
By default the CloudFormation stack spins up 2 VPN Gateway instances per 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 region. Once the instances are spun up they automatically detect other VPN Gateway instances running in other AWS regions and deploy IPsec VPN tunnels.
The default instance type is t2.medium, which can handle up-to 250 Mbit/s of bandwidth. Other instance types are also supported including t2.nano, m3.medium, m4.large, m4.xlarge, m4.2xlarge.
To learn more download the Managed IPsec VPN Whitepaper