VPN Hardware vs. Software VPN: 9 Key Differences in 2024

You’ve probably heard the debate about software VPNs and hardware VPNs – but what’s the difference? Does it really matter which one you pick?

If you’re struggling to figure out what you need, this quick breakdown should help you understand what you’re looking for.

Software and hardware VPNs have plenty of differences between them. Your choice will make a big impact on how you can connect securely to the internet and how much it’ll cost. Let’s first discuss why you need a VPN, to begin with.

A VPN’s Purpose

Before we get into the many differences between software and hardware VPNs, let’s quickly dive into what a virtual private network (VPN) does.

VPNs secure your network traffic and add to your online privacy. They encrypt the data going from your devices to the internet and reroute your connection through a private server, which also changes your IP address. That’s a nifty feature because it’ll hide your location and make it look like you’re accessing the web from the VPN server’s address.

Living in today’s digital world means opening yourself up to a whole new list of online threats, on your personal devices and at work. VPNs fight for your privacy and secure your device connections. They’re essential to your online safety, so you shouldn’t take this decision lightly.

That’s why, before you head off to pick a VPN, you should read on to discover how the two VPN types work and the benefits each provides.

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What Is a Hardware VPN?

A hardware VPN is a physical device that you connect to your computer (or other devices) to encrypt that device’s network connection. Typically, companies who want to maintain a secure network use hardware VPNs. What’s more, hardware VPNs allow employees to establish encrypted remote connections.

Hardware VPNs are sometimes called a “VPN router” or “VPN firewall”. Depending on their setup, they can maintain an encrypted connection for one device or many. Some companies install a virtual server for their network to run the VPN. Some companies and individual users prefer to use a cloud-based server network run by a VPN provider instead.

Hardware VPN Benefits

• • ⭐ Facilitates secure remote access – to an office’s intranet, for example.
  • ⭐ Gives you a secure dedicated IP address.
  • ⭐ Provides the ability to route your connection through your own virtual servers.
  • ⭐ Eliminates the need to trust a third party with your data.
  • ⭐ Enables a strong firewall web security layer.
  • ⭐ Takes the load off your other devices by managing encryption (in theory).
  • ⭐ Protects multiple devices at once (with the correct setup).

The Drawbacks of a Hardware VPN

• • ⛔ Expensive and technically complex setup and maintain.
  • ⛔ Slow updates, complicated to implement.
  • ⛔ Limited server locations, impeding speed & IP address options (on cloud-based servers).
  • ⛔ Limited firewall throughput (bandwidth) on some VPN routers.

What Is a Software VPN?

Software VPNs perform the same function as hardware VPNs. They encrypt and reroute your traffic. That said, you can install the software VPN directly on your device. A software VPN is usually an app. The VPN provider handles the encryption process on your device and reroutes the connection through one of the service’s remote servers.

Some devices, like computers, come with built-in VPN software. That allows you to set up your own virtual VPN server if you have the correct infrastructure.

Most people though, and small businesses, prefer a third-party VPN service provider that handles all the heavy lifting. That way, the provider covers the server maintenance, updates, and security. You simply have to keep your app updated.

Now that you understand how software and hardware VPNs work, let’s take a deep dive into the exact differences between the two. I’ll go into exactly what you get (and don’t get) with each type of VPN.

The Benefits of a Software VPN

• • 🎯 Easy to acquire and implement.
  • 🎯 Inexpensive on-going costs and no initial investment.
  • 🎯 Quick rollout for updates that are easily implemented.
  • 🎯 Open choice between shared and dedicated IP address options.
  • 🎯 Wide selection of server options across many countries.

The Drawbacks of a Software VPN

• • Reserves a small processing load for encryption (negligible on today’s devices).
  • Requires trusting a third-party service with your network data.
  • Limits network bandwidth (only small/free VPN providers).

Now that you understand how software and hardware VPNs work, let’s take a deep dive into the exact differences between the two. I’ll go into exactly what you get (and don’t get) with each type of VPN.

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Hardware VPN vs. Software VPN: The Major Differences

Hardware and software VPNs serve the same function on a basic level. Still, one may be a better solution for you than the other, depending on your needs. Have a look at this table if you just want a quick breakdown of the differences between software and hardware VPNs. Below I go into more detail about each key characteristic.

	Hardware VPN	Software VPN
Setup & Maintenance	❌ Complicated	✅ Fast & Easy
Price	❌ Expensive once-off, cheap on-going costs	✅ Cheap on-going costs
Scalability	❌ Expensive	✅ Cheap
Server Locations	❌ Limited	✅ Widespread
Security	✅ Great	✅ Great
Processing Load	✅ None	✅ Insignificant
Updates	❌ Hard and complex	✅ Quick and easy
Ease of Remote Access	✅ Always available	❌ Sometimes available
Connection Speed & Bandwidth	✅ Fast, unlimited	✅ Fast, unlimited

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1. Setup & Maintenance

	A hardware VPN is a physical device: it must be installed and set up manually. That requires technical expertise, especially since most devices don’t have user-friendly interfaces. The device and the server network have to be manually maintained unless you use a VPN provider’s cloud server network. Yet, maintenance is more of a headache for those who don’t have dedicated IT teams.
	Software VPNs don’t require much effort on your part. As soon as you’ve signed up and installed the app, you’re ready to go. They’re incredibly beginner-friendly, and many have customer support teams for those who need help. The service provider also takes care of the maintenance and technical requirements. That means you just have to update your app whenever a new update is available.

2. Price

Hardware VPNs are a large initial expense as you have to buy the device. After that, they level out, more or less, depending on your setup. For an internal virtual server network, you’ll have to pay the price of setting up and running the servers. Hardware VPN devices aren’t normally expensive to maintain, but the server network maintenance requires IT expertise, which is costly.   If you sign up for a cloud-based server solution, it’ll cost you a subscription fee. Many hardware VPN providers have their own cloud-based service.

Software VPNs have no setup costs and only charge a subscription price of your choice. Most VPN providers have different pricing tier options based on your subscription length.   Some also provide free versions, but these normally have bandwidth limits and fewer features. Some VPN providers offer a money-back guarantee. The industry standard is 30-days, but if you get CyberGhost VPN, you’re in for a comforting 45-day money-back guarantee.

3. Scalability

Scalability doesn’t matter as much if you’re using the VPN at home, but it’s an important consideration for a business. Hardware VPNs can’t grow with your company. As you get more employees, you’ll have to add more connections to your VPN. That means the load on your device and servers will grow.   You’ll either have to upgrade to new devices or buy additional ones to keep up with demand. That means more expensive purchases, which could be an obstacle to your growth.

Software VPNs don’t have the same issue because one VPN subscription normally supports multiple device connections.   Many VPNs only offer up to 5 simultaneous connections, but CyberGhost supports up to 7. That should be enough for most households. Businesses will have to spend a bit more, either for multiple subscriptions or a business solution. Some VPNs offer commercial subscription options that cater to a business’s unique needs.

4. Server Locations

Hardware VPNs don’t generally allow you to access blocked content abroad or overcome censorship. That’s because a hardware VPN has only one geographical location — the place where it’s physically set up, which is why you get a dedicated IP address. If you use a VPN’s cloud server solution, you’ll get access to a few more locations. Still, these are usually limited in scope.

Software VPNs offer a large selection of servers worldwide. Some providers offer thousands of servers, while others only have a few hundred. That impacts the number of countries you can connect to and how congested these servers may be.   When a VPN provider has few servers and many users, the servers would be congested due to the high connection load they’re bearing. CyberGhost VPN has a massive network infrastructure with thousands of servers across 91 countries, so congested servers are never an issue.

5. Security

Security is hardware VPNs’ biggest draw point for businesses. That’s because they can facilitate a trustless system. The device is self-contained, and you can have full control over your attack surface if you set up your own virtual network server. That also means you need to have the right expertise and constant vigilance to keep your system safe.

Software VPNs own and run the app and servers you use. That means you have to trust that the VPN won’t log or share your personal information or browsing data. That’s why you should choose a VPN with a strong No Logs policy and robust protection measures.   CyberGhost VPN is based in Romania, where we’re under no obligation to store customer data. We also release a quarterly Transparency Report, so you can see exactly how many requests we turn down.

6. Processing Load

	Years ago, this was the hardware VPNs’ major selling point. The device runs the encryption by itself. That means the devices you connect to the VPN don’t have to handle any load.
	These days, devices can easily handle the minimal load that comes with the encryption process. You can use CyberGhost VPN even on Smart TVs and routers.

7. Updates

	Hardware VPNs are more complicated to update because of their setup. Hardware VPNs get fewer updates, and manufacturers generally take time to roll out updates. This isn’t normally a problem, but when an exploit or bug emerges, the issue may go unpatched for a while. That means hackers can discover the exploit to get around the VPN’s protection and into your network/devices.
	Software VPN providers manage and distribute new software updates for their apps. As long as you allow automatic updates or look for new updates as they come out, your apps will always be up to date. Since the VPN provider always takes care of security, you stay protected 24/7 without having to worry about costly mistakes or waiting for important fixes.

8. Ease of Remote Access

Remote access, like when you’re trying to connect to your office’s intranet from a hotel, is the other area where hardware VPNs shine. They provide complete control over who can access the company’s network and how data is secured.   Hardware VPNs also make it much easier to implement role-based firewall limitations. The installation process and complexity make this more suitable for larger companies with an IT department.

Your IP address normally changes every time you connect to a VPN. That’s one of the main obstacles to remote access with software VPNs. Still, they can facilitate remote access if you use a dedicated IP address and/or a business solution. You’ll be able to access company resources on the cloud and the company’s intranet through allowlisting.

9. Connection Speed & Bandwidth

Hardware VPNs used to be faster than software VPNs because computers (and other devices) couldn’t handle the processing load well. That meant things would slow down when the device had to multitask one or more programs.

Today’s devices are more than capable of running VPN software without a hitch. You may encounter slower connection speeds with stronger protocols and the wrong configuration. That said, you can always talk to customer support to figure out the best configurations for you.

Your connection can also slow down because of long-distance server connections or high server loads, in which case, you can connect to a different server. You can also choose a faster VPN protocol depending on your needs.

As you can see, you have to consider many things before you get a VPN. If you’re still unsure which would be better for you, continue reading. I’ll quickly break down the core reasons why you should pick either option, so you can make the best choice based on your needs.

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What to Choose: Software or Hardware VPN

Many companies prefer to use a hardware VPN to maintain their security in-house and facilitate remote access. Individuals and smaller businesses tend to get a software VPN because it’s more convenient and less expensive. Software VPNs also come with a range of benefits because you can change your IP address to anywhere in the world.

Let’s quickly review the benefits you get with a hardware VPN vs. a software VPN setup:

Software VPN	Hardware VPN
✅ Easily change your IP address to access geo-restricted websites and libraries	✅ Great internal privacy & security
✅ Quickly overcome censorship	✅ Easy remote access
✅ Super convenient to use	✅ Fast connection speeds
✅ Relatively Inexpensive
✅ Great privacy and security
✅ Fast connection speeds
✅ Easy scalability

CyberGhost VPN is a premium software VPN. It offers a massive network with thousands of servers across 91 countries, and no-questions-asked security with a robust No Logs policy.

We use ultra-strong 256-bit AES encryption, so your data is safe from any breaches. Our automatic Kill Switch feature protects you if the VPN connection ever drops. We even give you a secure (optional) dedicated IP along with access to other security essentials. Secure your internet activity with the best software VPN on the market!

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Pick Your VPN

Hardware VPNs are physical devices that work well for remote access to internal company networks and are great tools for very specific needs. Software VPNs are more generally suited to most people’s needs, for security reasons or accessing streaming services on optimized servers. Become a Ghostie today and never worry about your privacy.

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