AWS Direct Connect Hosted Connections: A Deep Dive in AWS Resources & Best Practices to Adopt

AWS Direct Connect provides organizations with a dedicated network connection between their on-premises infrastructure and AWS services, bypassing the public internet to deliver more predictable performance and reduced bandwidth costs. As enterprises increasingly adopt hybrid cloud architectures and migrate critical workloads to AWS, the need for reliable, high-performance connectivity has become paramount. A 2023 survey by Flexera found that 87% of enterprises have a multi-cloud strategy, with 76% using hybrid cloud approaches, highlighting the critical importance of robust connectivity solutions.

Within the Direct Connect ecosystem, AWS Direct Connect Hosted Connections represent a flexible and scalable approach to dedicated connectivity. Unlike dedicated connections that require you to work directly with AWS at colocation facilities, hosted connections are provided through AWS Direct Connect Partners, making dedicated connectivity more accessible to organizations of all sizes. This partnership model has democratized access to dedicated AWS connectivity, allowing smaller organizations to benefit from the same performance and reliability advantages that were previously only available to large enterprises.

The hosted connection model addresses several key challenges in modern cloud connectivity. Traditional internet-based connections can suffer from unpredictable latency, variable bandwidth, and potential security concerns when transmitting sensitive data. Hosted connections provide a dedicated path that bypasses these issues while offering the flexibility to scale bandwidth up or down based on changing business needs. This approach has become particularly valuable as organizations deal with increasing data volumes, stricter compliance requirements, and the need for consistent performance across distributed applications.

In this blog post we will learn about what AWS Direct Connect Hosted Connections is, how you can configure and work with it using Terraform, and learn about the best practices for this service.

What is AWS Direct Connect Hosted Connections?

AWS Direct Connect Hosted Connections is a service that provides dedicated network connectivity between your on-premises infrastructure and AWS through a third-party AWS Direct Connect Partner. Unlike standard dedicated connections that require direct relationships with AWS at colocation facilities, hosted connections are established and managed by AWS partners who already have physical connectivity infrastructure in place.

The fundamental architecture of hosted connections creates a dedicated network path that bypasses the public internet, providing consistent bandwidth, reduced latency, and improved security for data transmission. This dedicated path is particularly valuable for organizations running latency-sensitive applications, transferring large volumes of data, or maintaining strict compliance requirements. The hosted model allows multiple customers to share the partner's physical infrastructure while maintaining logical isolation and dedicated bandwidth allocation for each customer's connection.

Hosted connections differ from dedicated connections in several key ways. While dedicated connections require you to establish a direct physical connection to AWS at a colocation facility, hosted connections leverage the existing infrastructure of AWS Direct Connect Partners. This means you can access Direct Connect benefits without the complexity and cost of establishing your own presence at AWS locations. The partner handles the physical layer connectivity, while you retain control over the logical configuration and routing of your connection. This model has made Direct Connect accessible to organizations that previously couldn't justify the investment in dedicated infrastructure.

Connection Types and Bandwidth Options

AWS Direct Connect Hosted Connections support various bandwidth options ranging from 50 Mbps to 10 Gbps, providing flexibility to match your specific performance and cost requirements. The available bandwidth options include 50 Mbps, 100 Mbps, 200 Mbps, 300 Mbps, 400 Mbps, 500 Mbps, 1 Gbps, 2 Gbps, 5 Gbps, and 10 Gbps. This granular bandwidth selection allows organizations to right-size their connectivity investment and scale up or down as business needs change.

The bandwidth allocation in hosted connections is dedicated, meaning your allocated bandwidth is reserved exclusively for your use and not shared with other customers. This provides predictable performance characteristics that are critical for business-critical applications. The partner's infrastructure may be shared among multiple customers, but each customer's bandwidth allocation is isolated and guaranteed through Quality of Service (QoS) mechanisms.

One significant advantage of hosted connections is the ability to establish multiple connections with different bandwidth allocations. Organizations often start with a lower bandwidth connection to test their Direct Connect setup and gradually increase capacity as they migrate more workloads. Some organizations maintain multiple hosted connections for redundancy, connecting to different AWS regions or availability zones to ensure high availability for their critical applications.

Partner Ecosystem and Provisioning

The AWS Direct Connect Partner ecosystem includes telecommunications providers, internet service providers, and specialized connectivity companies that have invested in Direct Connect infrastructure. These partners maintain physical presence at AWS Direct Connect locations and offer various service levels and support options. When selecting a partner, organizations should evaluate factors such as geographic coverage, service level agreements, support quality, and pricing models.

The provisioning process for hosted connections typically involves coordination between you, the AWS Direct Connect Partner, and AWS. The partner initiates the connection request on your behalf, specifying the bandwidth requirements and target AWS region. AWS then provisions the connection and provides configuration details that you use to establish routing and configure your on-premises equipment. This process is generally faster than establishing dedicated connections, as the partner's infrastructure is already in place.

Many partners offer additional services beyond basic connectivity, including managed routing, monitoring, and support services. These value-added services can be particularly beneficial for organizations that lack extensive networking expertise or want to focus on their core business rather than managing connectivity infrastructure. Some partners also offer hybrid solutions that combine hosted connections with their own private networks, extending connectivity options to locations where Direct Connect isn't directly available.

VLAN and BGP Configuration

Direct Connect Hosted Connections use Virtual Local Area Networks (VLANs) to create logical separation between different traffic types and customers. Each hosted connection supports a single VLAN that carries all traffic for that connection. This VLAN configuration is established during the connection setup process and provides the foundation for routing between your on-premises network and AWS.

Border Gateway Protocol (BGP) is used to exchange routing information between your on-premises network and AWS. Each hosted connection requires BGP configuration to advertise routes and establish dynamic routing relationships. You'll need to configure BGP peering with AWS using an Autonomous System Number (ASN) - you can use your own ASN if you have one, or AWS can assign a private ASN for your use.

The BGP configuration includes several important parameters that affect how traffic flows across your connection. You can advertise specific routes from your on-premises network to AWS, allowing fine-grained control over which traffic uses the Direct Connect path versus internet routing. Similarly, AWS advertises routes for your VPC subnets and other AWS resources, enabling your on-premises systems to reach AWS services through the dedicated connection.

Route filtering and path preferences can be configured through BGP communities and AS path prepending, giving you control over traffic engineering and failover scenarios. These advanced routing features allow you to optimize traffic flow, implement backup routing paths, and ensure that critical traffic takes the most appropriate network path based on your business requirements.

Virtual Interfaces and Multi-VPC Connectivity

While each hosted connection supports a single VLAN, you can create multiple Virtual Interfaces (VIFs) to connect to different AWS resources. Virtual Interfaces provide logical connections within your hosted connection that can be configured for different purposes. There are three types of Virtual Interfaces: private VIFs for connecting to VPCs, public VIFs for connecting to AWS public services, and transit VIFs for connecting to AWS Transit Gateway.

Private Virtual Interfaces connect your on-premises network directly to specific VPCs, enabling private communication with EC2 instances, RDS databases, and other VPC resources. Each private VIF can connect to only one VPC, but you can create multiple private VIFs on a single hosted connection to reach multiple VPCs. This capability is particularly useful for organizations with multiple AWS accounts or complex network architectures that require isolation between different environments.

Public Virtual Interfaces provide access to AWS public services like S3, DynamoDB, and other services that don't reside within a VPC. Traffic over public VIFs still uses your dedicated connection, providing the performance and reliability benefits of Direct Connect while accessing public AWS services. This can be particularly valuable for applications that need to transfer large amounts of data to services like S3 or require consistent performance when accessing AWS APIs.

Transit Virtual Interfaces connect to AWS Transit Gateway, enabling connectivity to multiple VPCs and on-premises networks through a single connection point. This architecture simplifies network management by centralizing routing decisions and reducing the number of VIFs required. Transit VIFs support more complex routing scenarios and can integrate with AWS Transit Gateway's advanced routing features, including route tables, propagation, and cross-region peering.

The ability to create multiple VIFs on a single hosted connection provides significant flexibility in network architecture design. Organizations can segregate different types of traffic, implement different security policies, and manage routing policies independently for each VIF. This flexibility allows the hosted connection to adapt to changing business requirements without requiring additional physical connectivity.

Managing AWS Direct Connect Hosted Connections using Terraform

Managing AWS Direct Connect Hosted Connections through Terraform requires careful planning and understanding of the service's unique provisioning model. Unlike many AWS resources that can be created instantly, hosted connections involve coordination with AWS Direct Connect Partners and have specific ordering and approval workflows that must be considered in your infrastructure-as-code approach.

Basic Hosted Connection Setup

The most common scenario for hosted connections is establishing connectivity for a single AWS region with basic routing requirements. This setup typically serves organizations that need dedicated connectivity for their primary production workloads.

This configuration establishes a hosted connection with a private virtual interface that connects to a Direct Connect Gateway. The connection_id references a connection created by your AWS Direct Connect Partner, which must be provided before running Terraform. The VLAN ID is typically assigned by the partner and must match their configuration.

Key dependencies include the partner-provided connection ID, VLAN assignment, and BGP configuration details. The Direct Connect Gateway enables connectivity to multiple VPCs through a single virtual interface, providing scalability for growing infrastructure needs. Organizations often use this pattern when they need to connect multiple VPCs across different AWS regions or accounts through a single hosted connection.

Multi-Region Hosted Connection with Transit Gateway Integration

For organizations with multi-region deployments, hosted connections can be integrated with AWS Transit Gateway to provide centralized routing and connectivity management across regions.

This advanced configuration demonstrates how hosted connections can integrate with Transit Gateway for sophisticated routing scenarios. The transit virtual interface enables connectivity to multiple VPCs across regions through a single hosted connection, providing significant cost savings and simplified management compared to multiple dedicated connections.

The configuration includes route tables for managing traffic flow between on-premises networks and AWS resources, with specific CIDR blocks defined for different network segments. Cross-region peering enables communication between Transit Gateways in different regions, creating a global network topology that can support complex enterprise architectures.

This pattern is particularly valuable for organizations with distributed workloads that need consistent connectivity across multiple AWS regions while maintaining centralized network management and security policies.

Best practices for AWS Direct Connect Hosted Connections

Working with AWS Direct Connect Hosted Connections requires careful planning and implementation to maximize performance, reliability, and cost-effectiveness. The following best practices will help you build a robust and scalable connectivity solution.

Implement Connection Redundancy and High Availability

Why it matters: Single points of failure can disrupt business operations and lead to significant downtime costs. Studies show that network outages can cost enterprises upwards of $5,600 per minute, making redundancy a critical investment.

Implementation: Always deploy multiple hosted connections across different AWS Direct Connect locations when possible. This creates geographic diversity and protects against facility-level issues. Configure your connections to different availability zones and use BGP routing to automatically failover between connections.

When designing your redundancy strategy, consider both active-active and active-passive configurations. Active-active setups provide better bandwidth utilization but require more complex routing configuration. Active-passive setups are simpler to manage but leave bandwidth unused during normal operations. Your choice should align with your traffic patterns and budget constraints.

Optimize BGP Configuration for Performance and Reliability

Why it matters: Proper BGP configuration directly impacts traffic routing, failover times, and overall network performance. Misconfigured BGP can lead to suboptimal routing paths, increased latency, and slower failover during outages.

Implementation: Configure BGP with appropriate AS path prepending, local preference values, and route advertisements. Use specific prefixes rather than default routes when possible to maintain better control over traffic flow.

Set up route advertisements carefully to avoid routing loops and ensure optimal path selection. Use community strings to tag routes and implement routing policies that align with your business requirements. Consider implementing BFD (Bidirectional Forwarding Detection) if your equipment supports it, as this can significantly reduce failover times from minutes to seconds.

Establish Comprehensive Monitoring and Alerting

Why it matters: Proactive monitoring helps identify issues before they impact operations and provides the data needed for capacity planning and performance optimization. Without proper monitoring, you may miss degradation patterns that could indicate impending failures.

Implementation: Set up monitoring for connection state, bandwidth utilization, packet loss, and latency metrics. Create automated alerts for threshold breaches and establish escalation procedures for different severity levels.

Implement log aggregation to collect and analyze BGP events, interface statistics, and routing table changes. This historical data becomes invaluable for troubleshooting intermittent issues and understanding traffic patterns. Consider integrating with third-party monitoring tools that can provide more detailed network analysis and automated remediation capabilities.

Implement Security Best Practices and Access Controls

Why it matters: While Direct Connect provides a private connection, security remains paramount. Proper access controls prevent unauthorized access and ensure compliance with security frameworks and regulations.

Implementation: Use dedicated VLANs for different types of traffic, implement network ACLs and security groups appropriately, and establish strict access controls for connection management. Never share BGP authentication keys between environments.

Regularly audit your Direct Connect configurations and access permissions. Implement least-privilege access principles for anyone managing connections, and use AWS CloudTrail to monitor all Direct Connect API calls. Consider implementing network segmentation to isolate sensitive traffic and reduce the blast radius of potential security incidents.

Plan for Capacity Management and Scaling

Why it matters: Bandwidth requirements change over time, and hosted connections have specific scaling characteristics that differ from internet-based connections. Poor capacity planning can lead to performance issues or unnecessary costs.

Implementation: Monitor bandwidth utilization trends and implement automated scaling procedures where possible. Work with your Direct Connect partner to understand their provisioning timelines and scaling capabilities.

Regular capacity reviews should include analysis of peak usage patterns, growth projections, and cost optimization opportunities. Some organizations find that multiple smaller connections provide better flexibility than single large connections, while others prefer the simplicity of fewer, higher-capacity links. Your choice should align with your traffic patterns, budget constraints, and operational complexity preferences.

Establish clear escalation procedures for capacity issues and maintain relationships with your Direct Connect partners. Understanding their service level agreements, support processes, and technical capabilities will help you make informed decisions about capacity planning and incident response.

Product Integration

AWS Direct Connect Hosted Connections integrate seamlessly with a broad spectrum of AWS services, forming the backbone of hybrid cloud architectures. The service acts as a networking foundation that enables secure, high-performance communication between on-premises infrastructure and AWS resources.

At the compute layer, hosted connections provide direct access to EC2 instances and ECS clusters, allowing applications to maintain consistent low-latency communication with on-premises databases or legacy systems. This integration becomes critical for applications that require real-time data synchronization or have strict performance requirements that cannot tolerate internet variability.

Storage services benefit significantly from hosted connections, particularly when dealing with large-scale data transfers. S3 buckets can be accessed directly without internet bandwidth costs, making data archiving and backup strategies more cost-effective. EFS file systems can be mounted from on-premises systems, creating truly hybrid storage solutions that span both environments seamlessly.

Database connectivity through hosted connections transforms how organizations approach data architecture. RDS instances and DynamoDB tables can be accessed with predictable performance characteristics, enabling database replication scenarios and hybrid database architectures that maintain consistency across environments.

The networking layer provides the most comprehensive integration opportunities. VPC endpoints work in conjunction with hosted connections to create fully private communication paths to AWS services. Route tables and security groups extend on-premises network policies into AWS, creating unified security and routing policies across hybrid environments.

Use Cases

Enterprise Data Migration and Synchronization

Organizations undergoing cloud migration rely heavily on hosted connections to move large datasets efficiently. A financial services company migrating petabytes of historical trading data can utilize hosted connections to transfer data without impacting their production internet bandwidth. The predictable performance characteristics allow for accurate migration timeline planning, while the dedicated nature of the connection ensures data security during transfer. This approach reduces migration costs by avoiding internet data transfer charges and provides the reliability needed for mission-critical data movement.

Hybrid Application Architectures

Modern applications often span both on-premises and cloud environments, requiring consistent network performance for optimal user experience. A retail organization might run their inventory management system on-premises while leveraging AWS for seasonal scaling and analytics. Hosted connections enable real-time inventory updates between systems, ensuring accurate stock levels across all channels. The low-latency characteristics of hosted connections make this hybrid approach viable, allowing businesses to maintain existing investments while gaining cloud benefits.

Disaster Recovery and Business Continuity

Hosted connections form the foundation of robust disaster recovery strategies by providing reliable connectivity to AWS-based backup and recovery resources. Healthcare organizations, for example, can replicate critical patient data to AWS in real-time, ensuring compliance with regulatory requirements while maintaining the ability to quickly restore operations. The dedicated bandwidth ensures that backup operations don't interfere with production traffic, while the reliability of the connection provides confidence in recovery capabilities.

Limitations

Geographic and Physical Constraints

Hosted connections are limited by the availability of AWS Direct Connect Partners in specific geographic regions. Organizations in remote locations may find limited partner options or higher costs due to the need for extended network infrastructure. The physical nature of the connection means that natural disasters or infrastructure failures at partner facilities can impact connectivity, requiring careful consideration of redundancy planning.

Bandwidth and Scaling Considerations

While hosted connections offer flexibility in bandwidth allocation, they operate within the constraints of the underlying dedicated connection provided by the partner. Organizations requiring extremely high bandwidth may find themselves competing with other customers on the same partner connection, potentially leading to performance variations during peak usage periods. Scaling beyond the partner's available capacity requires coordination and may involve longer lead times compared to internet-based solutions.

Cost Complexity and Vendor Dependencies

The hosted connection model introduces additional complexity in cost management, as organizations must factor in both AWS charges and partner fees. This dual billing relationship can complicate budgeting and cost optimization efforts. Additionally, the dependency on AWS partners creates potential vendor lock-in scenarios, where changing providers requires significant coordination and potential service disruption.

Conclusions

AWS Direct Connect Hosted Connections represent a sophisticated networking solution that bridges the gap between on-premises infrastructure and cloud resources. They provide organizations with the performance, reliability, and cost benefits of dedicated connectivity without the complexity and capital requirements of establishing direct relationships with AWS at colocation facilities.

The service excels in scenarios requiring predictable network performance, significant data transfer volumes, or strict security requirements. Through the partner ecosystem, hosted connections have made dedicated AWS connectivity accessible to organizations of all sizes, democratizing access to enterprise-grade networking solutions.

However, the complexity of managing partner relationships, geographic limitations, and the need for careful capacity planning mean that hosted connections require thoughtful implementation and ongoing management. Organizations must balance the benefits of dedicated connectivity against the operational complexity and cost considerations.

The integration ecosystem surrounding hosted connections is comprehensive, touching virtually every AWS service and enabling sophisticated hybrid architectures. This broad integration capability makes hosted connections a strategic investment for organizations committed to hybrid cloud strategies.

When implementing hosted connections with Terraform, the interconnected nature of networking resources creates complex dependency relationships that can significantly impact infrastructure changes. Understanding these dependencies and their potential blast radius becomes critical for maintaining operational stability in production environments.