Vnet Peering

 

Vnet peering enables you to seamlessly connect networks in Azure Virtual Network

Vnet peering is a mechanism that connects two virtual networks (Vnets) in the same region through the Azure backbone network. Once peered, the two virtual network appear as one for all connectivity purposes.

Global VNet peering enable connectivity across all Azure public regions without additional bandwidth restrictions and as always keeping all your traffic on the Microsoft Backbone. Global VNet Peering provides you with the flexibility to scale and control how workloads connect across geographical boundaries, unlocking and applying global scale to a plethora of scenarios such as data replication, database failover, and disaster recovery through private IP addresses.

If you have 2 in different regions and you want to connect them, in that case you establish connection using Vnet peering.

The traffic between VM use the MS backbone network  and the connection is built via MS private network and it has high bandwidth and low latency.

VPN Gateway:

In case to 2 or 3 separate subscriptions, we will have to use VPN gateway.

VPN gateway travels over the public internet, so you can establish the connectivity between 2 Vnets by using VPN gateway.