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Communications Between VM's

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Hello,

I am trying to get a definitive answer around how communication between Virtual Machines (or any service) is executed when within the same region (data centre). 

My current understanding is that when VM's communicate via their public DNS, then this traffic will exit the data centre and go via the public internet. This will incur latency.

Using a Virtual Network, and communicating via the internal IP, will then ensure that communications happens within the data centre, and does not go over the public internet.

Are these assumptions accurate? If not, what is the mechanism for communications? I can imagine edge routing around the network but haven't found any documentation describing this.

Regards,

Damian


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