Virtual Private Cloud
Amazon VPC (https://docs.aws.amazon.com/vpc/latest/userguide/what-is-amazon-vpc.html) enables customers to launch AWS resources in a virtual network dedicated to the customer's account. It is truly a customizable network that allows you to define your IP address range, add and delete subnets, create routes, add VPN gateways, associate security policies, connect EC2 instances to your own data center, and much more.
In the early days, when VPC was unavailable, all EC2 instances in an 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 and the launch of VPC in 2009, VPC functions were some of the most requested features of AWS.
The packets leaving your EC2 host in a VPC are intercepted by the Hypervisor. The Hypervisor will check the packets against a mapping service that understands your...