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Hardware VPN vs. Software VPN: Differences

Choosing the right cybersecurity tools for your home or office can be a bit of a hassle. Do you need a VPN? If so, what kind? If you are looking for a device to encrypt your internet traffic and protect every device connected to it, a hardware Virtual Private Network might seem like a reasonable option. But what about software Virtual Private Networks? Is a physical VPN a good option at all?

Emily Green

Emily Green

Nov 01, 2021 · 1 min read

Hardware VPN vs. Software VPN: Differences

What is a VPN?

A VPN or virtual private network is a digital security tool that encrypts the data traffic to and from a user’s device. It works by rerouting the device's online traffic through a secure server, changing the user’s IP in the process. This provides privacy and security from eavesdroppers.

What is a hardware VPN?

VPN hardware comes in various forms. In this article we’re defining VPN hardware as dedicated network hardware that encrypts and supports VPN functions. VPN hardware devices have dedicated processors that encrypt the data traffic of a network. You can even get routers that are preconfigured with VPN capabilities. Check out Flashrouters for the best VPN router options available.

Most hardware VPNs are geared towards businesses — setting up VPN hardware for home use requires significant technological know-how, time, and finances. But it also has its advantages:

  • High level of security
  • Dedicated IP
  • Easy remote access to the internal office network and other office branches
  • It takes the load off of your device’s central processing unit, since a separate dedicated device takes care of encryption

Hardware VPN appliances were long considered a more secure and better alternative for businesses, but software VPNs are hot on hardware options’ heels. In some cases, software VPNs can outperform VPN hardware in both business and personal use.

What is VPN software?

A software virtual private network, or VPN software, provides mostly the same functionality as a hardware option — data encryption and changing the IP address. However, a VPN software can be installed directly onto a user’s device as an app. It means that data encryption happens on the user's own device, rather than seperate, dedicated hardware.

Some devices even have VPN functionality built-in. However, there are also third-party services for both everyday consumers, like NordVPN, and businesses, like NordLayer. The main advantages of VPN software services are:

  • No need for advanced technical knowledge
  • Less expensive than hardware
  • Variety of virtual locations

On the other hand, the aforementioned features are vital for some enterprises. And now, more and more software VPNs provide specifically business-oriented services. With so many options available, how can a company pick the best VPN hardware or VPN software for its business needs?

VPN hardware vs. VPN software

Let’s compare VPN hardware and VPN software by looking at the key factors: speed, locations, setup, maintenance, updates, remote access, scalability, and price.Comparing hardware VPNs and software VPNs


You may have read that VPN hardware devices are faster and more reliable than a software-based VPN solution. However, this was only true more than a decade ago, when computers had lower processor speeds and struggled to multitask. Nowadays, even our smartphones are capable of simultaneously running multiple programs (including a software VPN) with little to no impact on their performance.

In addition to this, any occasional speed issues with VPN software can usually be fixed in a matter of clicks, i.e., by restarting your device or choosing a different server location.


One of the biggest benefits VPN software can provide is a large variety of virtual locations. Most third-party software VPN services offer dozens of countries that your employees can connect to.

With a hardware option, your employees will likely have less countries to choose from since the devices have to be physically placed in any given location to provide access to it. If your business has branches in New York and London, for example, those will be the two virtual locations your employees can access.

Setup, maintenance, and updates

Software VPN like NordLayer can be deployed in hours. Once it’s set up, the app for employees can be installed within minutes. Even a beginner will be able to do it, and if not, most providers offer 24/7 online support.

On the other hand, setting up a hardware VPN will require more technical expertise. Because it usually doesn’t have a user interface, you will have to configure your VPN hardware devices manually. Setting up remote access for your employees will also be much trickier, but we’ll cover this in the following section. Hardware VPN is more difficult to set up but the payoff is worth it for some.

When it comes to updates, software VPNs also have an advantage. If you are using a premium software VPN, you’ll probably hear about the latest updates from the service provider as soon as they are released (these could appear in the form of pop-ups, app store reminders or email reminders). Many software VPNs, along with offering next-generation encryption also offer extra VPN security features such as NordVPN’s CyberSec, kill switch or VPN browser extensions.

Remote access

Hardware VPNs create secure and encrypted connections so that employees can access the company’s intranet away from the office. Setting it up can get quite complicated, but just like with the hardware VPN setup and, if you have a dedicated team of IT professionals with technical know-how, they can set up the feature.

However, when it comes to software, not all VPNs offer remote access to the company’s internal network. However, it does enable secure remote access to company resources in the cloud or to office intranets. It enables each employee to reach company data remotely from any of their devices using whitelisting. NordLayer can provide site-to-site capabilities and offers on-premise dedicated servers.


Another vital factor every business should consider is how easy (or difficult) it’ll be to upgrade their VPN if the company grows. Each hardware VPN only provides a limited number of VPN tunnels. This means that if your company is growing, you will probably soon have to invest in a new device. It’s more cost effective and much easier to upgrade a software VPN as you will only need to buy additional service for your new employees.


Hardware devices are definitely the costlier option. Aside from the fact that the devices themselves are quite expensive, they also require people with technical knowledge to set up, configure, and maintain.

A hardware VPN price might only be affordable to large corporations, while software is entirely scalable, working well for everything from startups to multinational corporations.

Which is best for you?

A software VPN is the perfect option for small and medium businesses that are looking to expand and need a simple solution that’s flexible, adaptable, and easy to manage. Hardware VPNs might appeal more to large corporations that might have bigger budgets and are not planning to grow dramatically.

NordLayer account:

NordVPN offers businesses advanced VPN solutions that include:

  • Dedicated IP addresses
  • Control panel
  • Kill switch
  • Two-factor authentication
  • Auto-connect
  • 30+ virtual locations
  • A dedicated account manager and a 24/7 priority support team
  • License transferability – easily transfer user licenses from one account to another
  • Centralized billing – pay in one installment
  • User administration – manage all user accounts from a single account
  • Next-gen site-to-site capabilities
  • Centralized configuration and management
  • LDAP Active Directory
  • API access
  • On-premise dedicated servers

Protect your company’s network with an advanced business VPN. Get NordLayer today.

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