Proxy vs VPN for Businesses

Learn the main differences between proxy vs VPN for businesses tools to hide actual IP address & unblocking geo-restricted content.

By Claudio Pires
Updated on March 29, 2024
Proxy vs VPN for Businesses

With the growing demand for online anonymity, companies use proxies or VPNs to hide their real IP address and location while doing business operations. There are many use cases where you can benefit from either of the tools – from better security and unblocking geo-restricted content to collecting large amounts of data. In this article, you’ll learn the main differences between proxy vs VPN for businesses tools to hide actual IP address & unblocking geo-restricted content.

However, proxies and VPNs have different capabilities, so it’s important to understand the advantages of each technology. Let’s find a better fit for your business. 

What Is a Proxy Server?

A proxy is an intermediary server between a user’s device and the internet. When you send a request to the target website through a proxy, the server changes your real IP address and location. So, the website sees you as a different person. In essence, proxies are different IP addresses you receive after connecting to a proxy server. 

There are four main types of proxies: 

  • Datacenter proxies are held in servers of web hosting companies like Google Cloud. They are very cheap and fast, yet very easy to detect. 
  • Residential IPs are probably the most popular type. They come from real users’ devices, so they’re hard to detect. However, residential proxies are more expensive than their datacenter counterparts.
  • Static residential (ISP) proxies are associated with an internet service provider but don’t involve end users. They have the qualities of both datacenter and residential proxies – ISP proxies are fast and hard to block. 
  • Mobile addresses use a cellular connection, so your traffic goes through a mobile device connected to the network of a mobile carrier like Verizon. This type of proxy is the hardest to block but the most expensive.

All types have advantages and disadvantages, and the choice is based on specific project requirements and the budget. Learn the main differences between proxy vs VPN for businesses tools to hide actual IP address & unblocking geo-restricted content.

What Is a VPN?

Similar to proxies, a Virtual Private Network (VPN) uses an external server that routes your connection through itself. The major difference is that your connection is encrypted with cryptographic algorithms. 

In other words, your Internet Service Provider won’t be able to monitor what you’re doing online. This also applies when you connect to an unsecure network like public Wi-Fi; your information will remain private.

There are two types of VPNs – client-based and site-to-site. The first one allows you to install a VPN on a remote device and is mainly used by individual users. The second type is better for companies because it handles remote connections between entire networks.

Similarities Between Proxies and VPNs 

  • Both change your IP address and location. When you use a proxy or a VPN, you get a different IP address and can choose any location the services provide.
  • Both overcome geo-location restrictions. If you’re using either of the two services, you can access websites that are restricted to particular places. For example, Instagram and TikTok are banned in some countries and sometimes in the workplace or school. Also, platforms provide different content depending on your location, so by changing your location, you can reach various content on Amazon Prime or Netflix. Learn the main differences between proxy vs VPN for businesses tools to hide actual IP address & unblocking geo-restricted content.

Differences Between Proxies and VPNs

  • Proxies are app-based, while VPNs work at the operating system level. A proxy only affects traffic on the app it’s set up for, while a VPN will affect all your connections once you start using the service on your device.
  • A VPN is easy to detect. While a VPN changes your online identity, you won’t be able to hide the fact that you’re using it. This can be an issue with platforms like Netflix that deliberately try to block a person using a VPN.
  • Proxies allow making many connections at once. Some use cases like web scraping require using hundreds of IPs at the same time. You won’t be able to send so many requests with a VPN. Some proxies, such as residential ones, come with a pool with millions of different addresses. 
  • VPNs encrypt the traffic. This makes VPN connections more secure than proxies.
  • Proxies are faster. In particular, datacenter IPs are faster than VPNs because they often have higher bandwidth and fewer encryption layers.

Choosing Proxy vs VPN for Businesses Main Differences

Now that you’re familiar with all the peculiarities of proxies and VPNs let’s see which one is better for your business.

  • Improving privacy. Both proxies and VPNs can improve your privacy by changing your perceived location, but VPNs are better for the job because they use end-to-end encryption. 
  • Protecting internal networks. VPNs are usually used in businesses to encrypt communications between devices, securing data that flows into (and out) an organization’s internal network.
  • Accessing geo-restricted content. To overcome website restrictions, you can use proxies or VPNs, depending on your preferences and budget.
  • Web scraping. The primary use case of proxies is automated data collection. With a proxy server, you can use multiple IP addresses so that a website won’t limit the requests you make or block you.
  • Aggregating data. It’s a subset of web scraping that lets you gather information from multiple sources. For example, you can present the data as a service, like a travel fare or price comparison website. 
  • Social media account management. Dealing with multiple accounts isn’t easy. Most platforms don’t allow you to run more than five accounts from a single IP address. So, social media marketers use proxies to manage bulk accounts because you can assign a unique IP address to each account.

Proxy vs VPN for Businesses Differences Conclusion

To sum up, the decision between proxies and VPNs for businesses depends on things like security, scalability, and budget. Proxies are ideal for running a large number of automated tasks or social media account management because you can use multiple IP addresses, while VPNs can improve your privacy.

Claudio Pires

Claudio Pires is the co-founder of Visualmodo, a renowned company in web development and design. With over 15 years of experience, Claudio has honed his skills in content creation, web development support, and senior web designer. A trilingual expert fluent in English, Portuguese, and Spanish, he brings a global perspective to his work. Beyond his professional endeavors, Claudio is an active YouTuber, sharing his insights and expertise with a broader audience. Based in Brazil, Claudio continues to push the boundaries of web design and digital content, making him a pivotal figure in the industry.