A private network connection between two cloud VPCs that lets services communicate without traversing the public internet.
VPC peering is a private network connection between two virtual private clouds (VPCs) on the same cloud provider (AWS-to-AWS, GCP-to-GCP) that lets resources in either VPC communicate as if they were on the same network. Peering is one-to-one (not transitive), supports cross-account and cross-region setups, and is the standard way to expose internal services to a customer's environment without the latency and security cost of going over the public internet. Cross-cloud connectivity uses related but distinct primitives (PrivateLink, Cloud Interconnect, Transit Gateway).
Enterprise customers increasingly require private-network connectivity to vendor services, no public endpoint, no internet egress, no shared IP space, for compliance and security reasons. Vendors that don't support VPC peering or PrivateLink lose enterprise deals during the security review. For SRE teams, peering also matters because routing and DNS quirks across peered VPCs are a common, hard-to-diagnose source of incidents.
See the part of the platform that handles vpc peering in production.