OCI Networking Series – Part 3: Hybrid Networking with IPSec & FastConnect

 Objective:

In this blog, we take a deep dive into hybrid networking in Oracle Cloud Infrastructure (OCI), focusing on how enterprises securely and reliably connect their on-premises data centers to OCI. We’ll explore IPSec VPN, FastConnect, Dynamic Routing Gateway (DRG), customer edge router considerations, and real-world architectures — including how OCI integrates with other cloud providers like Azure, AWS, and Google Cloud Platform (GCP).

Why Hybrid Networking is Critical in OCI

Hybrid networking enables enterprises to extend their existing on-premises infrastructure into the cloud while ensuring business continuity, data security, and scalability. Enterprises often face scenarios such as:

✔ Gradual migration of workloads
✔ Disaster recovery and backup strategies
✔ Secure communication across cloud and on-prem environments
✔ Regulatory compliance and data sovereignty needs
✔ Multi-cloud deployments for performance optimization

OCI’s networking services empower to design secure, high-performance, and cost-effective hybrid architectures while maintaining control over traffic flow, encryption, and routing.

The Role of DRG in Hybrid Networking

The Dynamic Routing Gateway (DRG) is the central virtual router that connects your OCI VCN with on-premises networks through IPSec VPN or FastConnect.

Key Functions

✔ Route propagation between OCI and customer networks
✔ Central management of hybrid traffic flows
✔ Integration with route tables and security controls
✔ Support for multiple attachments — VPN, FastConnect, and VCN peering

Customer Edge Router – Essential Configuration Considerations

The on-premises router must meet certain standards to establish and maintain reliable hybrid connections.

Must-Have Features

✔ Support for IPSec and IKEv2 protocols
✔ Dual tunnel configuration for high availability
✔ Sufficient encryption processing capacity
✔ BGP (Border Gateway Protocol) support for dynamic route exchange
✔ Compatibility with provider-specific interfaces for FastConnect
✔ Security configurations to meet enterprise requirements

Example Use Case – Accessing OCI Databases from On-Premises

A common hybrid architecture scenario:

• An on-premises ERP system requires secure access to OCI’s Autonomous Database
• Dual IPSec VPN tunnels ensure redundancy during business hours
• A FastConnect circuit handles scheduled data replication and high-volume transfers
• DRG manages route propagation between on-prem and OCI
• Security rules restrict traffic to necessary ports and addresses
• Monitoring ensures availability, performance, and fault detection

This setup guarantees secure, high-performance communication while minimizing downtime and complexity.

IPSec VPN – Secure Internet-Based Connection Without Additional Charges

IPSec VPN provides encrypted communication over the public internet between your on-premises network and OCI’s Virtual Cloud Network (VCN) through the Dynamic Routing Gateway (DRG).

Key Features

✔ Uses industry-standard IPSec protocols and IKEv2 for secure tunnel establishment
✔ Supports dual tunnels for high availability (HA)
✔ No additional VPN charges — only bandwidth usage is billed
✔ Best suited for small offices, backup connections, or moderate workloads
✔ Provides encrypted communication without complex infrastructure changes

Limitations

✔ Internet variability can affect latency and throughput
✔ Not recommended for large-scale data transfers
✔ Encryption overhead may impact performance in compute-intensive environments

Setup Highlights

1. Attach a DRG to your OCI VCN
2. Create an IPSec connection in the OCI Console
3. Configure customer edge routers with matching encryption settings
4. Establish two tunnels for redundancy
5. Monitor and troubleshoot using OCI’s tools

There are 2 tunnels Tunnel1 and tunnel 2 for redundancy purpose. you can configure the parameters accordingly for both the tunnels. First create the CPE device which has the public IP from on-prem and then attach the CPE device to the IPSec connection.

As shown in above image there 3 routing type - BGP Dynamic routing, Static routing and Policy Based routing.

BGP Dynamic Routing: Uses Border Gateway Protocol (BGP) to automatically exchange and update routes between OCI (via DRG) and customer edge routers, enabling scalable and resilient connectivity.

Static Routing: Administrator manually defines fixed routes between on-premises and OCI; simple but less flexible as changes require manual updates.

Policy-Based Routing (PBR): Routes traffic based on policies such as source, destination, or application type, allowing granular control beyond just destination IPs.

FastConnect – High-Speed Private Connectivity for Mission-Critical Workloads

FastConnect provides a private, high-bandwidth, and low-latency connection between your on-premises network and OCI, bypassing the public internet. It is ideal for performance-sensitive workloads requiring consistent bandwidth and secure communication.

Peering Types

• Private Peering: Access OCI services like compute, block storage, or databases via private IP addresses.

• Public Peering: Access public OCI services like Object Storage or APIs securely over Oracle’s network.

Key Benefits

✔ Dedicated link with guaranteed bandwidth
✔ Predictable, low-latency connections
✔ Supports multiple circuits and failover strategies
✔ Enables large data transfers, replication, and analytics pipelines

Configuring FastConnect in OCI begins with creating a Dynamic Routing Gateway (DRG) and attaching it to your target VCN. Next, you set up a FastConnect connection, choosing either a FastConnect Partner (via an Oracle-approved provider) or FastConnect Direct (physical cross-connect at an Oracle colocation). 

For partner connections, you configure a virtual circuit, which can be single (basic) or redundant (for high availability). With FastConnect Direct, you establish physical connectivity and map it to a virtual circuit in OCI. After provisioning, configure BGP peering between your customer edge router and the OCI router to dynamically exchange routes. 

Redundancy can be added at the device, location, or configuration level to ensure resilience. 

Finally, validate the setup with connectivity tests and monitor the circuit using OCI’s monitoring tools.

FastConnect Partner: Connect through an Oracle-approved network provider.

Single Virtual Circuit: One dedicated connection through the partner (no redundancy).

Redundant Virtual Circuits: Two independent partner circuits for high availability.

FastConnect Direct: Direct physical cross-connect to Oracle at a colocation facility. Provides maximum control, lower latency, and is ideal for enterprises with existing colocation presence.

Redundancy Models:

Location Redundancy: Two FastConnect links from different physical sites.

Single FastConnect: One connection only (entry-level, no failover).

Device Redundancy: Dual edge devices at the same location for failover.

Configuration Redundancy: Dual circuits with BGP routing policies for seamless failover.

Below table shows the comparison between IPSec VPN and Fastconnect.

Hybrid Connectivity with Other Cloud Providers

For enterprises leveraging multi-cloud strategies, OCI’s hybrid networking solutions integrate seamlessly with equivalent offerings from other major cloud providers. Currently Oracle database facility is available in all major cloud providers like Azure, Google and AWS, there are many scenario's which has database in OCI and application setup is in the other cloud provider.  

🔗 OCI + Azure

OCI FastConnect ↔ Azure ExpressRoute

Enables private, high-bandwidth links between OCI and Azure, allowing workloads such as analytics, disaster recovery, and secure API access across clouds.

🔗 OCI + AWS

OCI FastConnect ↔ AWS Direct Connect

Provides private links for data replication, backup, and distributed applications between OCI and AWS regions.

🔗 OCI + GCP

OCI FastConnect ↔ Google Cloud Interconnect

Offers scalable, secure connectivity between OCI and Google Cloud services, supporting data pipelines, machine learning workflows, and cross-cloud architecture.

 Multi-Cloud Use Cases

✔ Disaster recovery across clouds
✔ Secure data pipelines for analytics
✔ Low-latency connections between cloud-native services
✔ Compliance-driven architectures
✔ Cost-effective multi-cloud resource optimization

Summary

In this part of the OCI Networking Series, we explored how hybrid networking enables secure, high-performance communication between on-premises environments and Oracle Cloud Infrastructure. We covered:

✔ IPSec VPN’s role in secure, internet-based connections without additional VPN charges
✔ FastConnect’s high-bandwidth, low-latency private connectivity for mission-critical workloads
✔ DRG’s routing capabilities in managing hybrid traffic
✔ Customer edge router requirements for encryption, redundancy, and dynamic routing
✔ Practical scenarios like accessing OCI databases from on-premises
✔ A comparison of IPSec VPN vs FastConnect
✔ Multi-cloud hybrid architectures using Azure ExpressRoute, AWS Direct Connect, and Google Cloud Interconnect

By implementing these best practices, organizations can confidently extend their networks into OCI, optimize performance, and ensure business continuity.