Virtual private cloud
Amazon Virtual Private Cloud (Amazon VPC) enables customers to launch AWS resources into a virtual network dedicated to the customer's account. It is truly a customizable network that allows you to define your own IP address range, add and delete subnets, create routes, add VPN gateways, associate security policies, connect EC2 instances to your own datacenter, and much more. In the early days when VPC was not available, all EC2 instances in the AZ were on a single, flat network that was shared among all customers. How comfortable would the customer be with putting their information in the cloud? Not very, I'd imagine. Between the launch of EC2 in 2007 until the launch of VPC in 2009, VPC functions was one of the most requested features of AWS.
Note
The packets leaving your EC2 host in a VPC are intercepted by the Hypervisor. The Hypervisor will check them with a mapping service which understands our VPC construct. The packets leaving your EC2 hosts are encapsulated...