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VPNs vs Proxies: What's Best for Business

By Claudio Buttice
Published: May 25, 2022
Presented by smartproxy
Key Takeaways

While either a VPN or proxy will offer advantages for your business there are some cases where a proxy will be precisely what you need. 

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Protecting your data has never been as important as it is now. According to Cisco, in 2020, 84% of respondents declared they care for their privacy and the safety of their data, and 80% of them want to act appropriately to protect them. The recent events escalated global cyberwarfare to unprecedented levels, and being proactive in securing critical business assets is a fundamental necessity for enterprises of all sizes.

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Virtual private networks (VPNs) and proxies, like the ones provided by Smartproxy, are both viable solutions to reduce potential risks in a relatively simple way. They add another layer between a users’ browser and the hypothetical malicious agent looking to track their activities. But they do more than just this. While VPNs are generally used for security and privacy purposes, proxies are mostly used for business automation and web scraping. However, besides obvious strengths, both solutions have their own limits. Therefore, it’s hard to decide which one may better suit your business’ needs.


What are proxies and VPNs, how do they work,how are they different, and which one to pick? Here’s a quick recap to guide you towards the right choice.

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What is a VPN and how does it work?

A Virtual Private Network (VPN) is a service that ensures that a public internet connection becomes a private network by establishing a secure and anonymous connection with a dedicated server. It’s done by providing the user with an end point that is used to connect to the internet, effectively changing the original IP address to a different one before it can reach its final destination. It creates a data tunnel between the user’s device and the web so that the user’s original location is hidden to protect its privacy.

Depending on the VPN service, data may also be encrypted before it’s sent to the online destination. Encryption is generally achieved by scrambling the original dataset with microdots, pics, or extra codes. The VPN server decrypts this unreadable ciphertext when it’s sent and received, so that no one can intercept it and steal it. (Read also: Malicious VPN Apps: How to Protect Your Data.)

What is a proxy and how does it work?

A proxy server (or just a proxy) is an intermediary that acts as a gateway between the user’s device and the website. In other words, the user connects with the proxy, and then it communicates on behalf of the user with their final destination (such as a website). Similarly to VPNs, this intermediation occurs on both sides, so proxies can also be used to filter content, act as firewalls, and provide a certain degree of privacy and security. They offer shared network connections and cache data to speed up multiple connection requests.


Different proxies may come with various properties and functionalities. Here are the most common types:

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  • Forward Proxy. It focuses on traffic going from an isolated, private network to the final destination via a firewall. Every time it receives a request from a network that allows a single entry point, it validates its legitimacy and forwards it to the web server. Forward proxies are used for harvesting data and automation.

  • Reverse Proxy. As the name suggests, a reverse proxy works on the other side of a forward proxy. It acts at the side of the web server, processing and filtering requests, and preventing direct communication.

  • Transparent Proxy. Typically used by businesses, universities, and public libraries, a transparent proxy forcefully intercepts the connection between the user and the internet without modifying requests and responses. Since they’re invisible, they don’t affect the user’s experience, but they may filter certain content or prevent access to specific networks or sites.

  • Distorting and Anonymous Proxy. Any request that comes from the device goes to the proxy server. It hides the user’s IP to protect identity and stop any targeting efforts from the destination side, or provide a false one (distorted) from a different location to allow access to geo-restricted sites.

Which one is better for your business? A VPN or a proxy?

There’s no simple answer to this question. They both have their own benefits and drawbacks, and which one is better ultimately depends on the specific needs of your organization. Here’s a summary that can help you decide.

Common ground between VPN and proxies

There are some things that both VPNs and proxies can ensure. In particular:


  • Both of them provide an extra layer of privacy and protection by acting as an intermediary between the user and the internet.

  • They can effectively hide your IP and the information behind it to preserve anonymity.

  • They’re a good solution if you need to bypass geo-restrictions and access blocked resources.

  • They reduce your internet speed a bit (although not to the same extent).

  • The overall level of security and efficiency may depend on the quality (and price) of the service.

Pros and cons of a VPN

The most obvious advantage of choosing a VPN over a proxy server is that VPNs encrypt all data that is sent and received. They’re generally preferred when a highly secure individual communication must be guaranteed. VPNs don’t just reroute traffic from a specific entry point, but rather everything that goes via the system. Therefore, they offer a much higher degree of coverage since they include background applications from all devices.


However, as the request must travel through intermediaries, a certain degree of latency is unavoidable, which may be an issue when prioritizing connection speed. Good VPNs don’t come cheap, and they usually are a much more costly solution than a proxy server. On the other hand, better VPN providers generally offer advanced features that range from ad blockers to kill switches, and more secure encryption levels. (Read also: Encryption vs Law Enforcement: How it Affects Your Privacy.)


Pros and cons of a proxy

While many think of proxies as a cheaper, but less secure alternative to VPNs, this is far from the truth. To some extent, it is true that for simpler needs such as hiding the occasional IP address now and then, in some cases proxies can be preferred when they offer a simpler or cheaper solution. However, the situation is a bit more nuanced. Proxies act as a centralized entry point for all requests in your network. This means that if your business handles more than just a handful of users, proxies can efficiently distribute and balance traffic loads to improve your overall network speed and performance.


They can save local copies of websites which allows improved bandwidth use and deeper monitoring of your traffic and data. High quality proxies as the ones from Smartproxy can harvest enormous amounts of data to monitor your users’ and employees’ activities, preferences, and activities, preventing theft of sensitive data and improving corporate security.

Forward proxies are often used for business purposes to extract data from third-party sites and vendors. By submitting multiple requests at once to a website using different IPs, a lot of info can be tracked with no risk of getting blocked or banned by the host. Proxies can generate both mobile, residential and datacenter IP addresses for mass scale web tracking and scraping. (Read also: Encryption isn't Enough: Critical Truths About Data Security.)

The Bottom Line

Both VPNs and proxies are great solutions to overcome geographic limitations and provide privacy and anonymity. VPNs tend to be a better alternative for individual navigation and environments that require a higher degree of security.

Proxies are a better solution for automating tasks and unlocking the potential of data sources. It’s an irreplaceable tool for data scraping purposes and monitoring the activities of your users and employees.


Proxy providers can help your business set up a simpler solution. Smartproxy offers a variety of products, such as a 40M+ residential IPs, datacenter proxies from the US, dedicated datacenter proxies that allow full control of the IPs you got, or SERP Scraping API that combines a proxy network, web scraper, and data parser – all in one awesome product. It also has extensions and other software for free, including X Browser, Smart Scraper, Firefox and Chrome browser extensions, and Address Generator. The provider is a comfortable choice for both newbies and pro-level users, as it offers a powerful combination of quality, simple use, and affordable prices.



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Written by Claudio Buttice | Data Analyst, Contributor

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Dr. Claudio Butticè, Pharm.D., is a former clinical and hospital pharmacist who worked for several public hospitals in Italy, as well as for the humanitarian NGO Emergency. He is now an accomplished book author who has written on topics such as medicine, technology, world poverty, human rights, and science for publishers such as SAGE Publishing, ABC-Clio, and Mission Bell Media. His latest books are "Universal Health Care" (2019) and "What You Need to Know about Headaches" (2022).

A data analyst and freelance journalist as well, many of his articles have been published in magazines such as Cracked, The Elephant, Digital Journal, The Ring of Fire, and Business Insider. Dr. Butticè also published pharmacology and psychology papers on several clinical journals, and works as a medical consultant and advisor for many companies across the globe.

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