Azure Connect is a service found on the older Azure.com portal and allows connectivity between on-premise and cloud servers/roles/resources. It creates a virtual IP (overlay) network - pretty much a VPN.
Azure Virtual Network (found on the new Azure portal) is ALSO touted as a VPN solution for also the same purpose however the configuration seems a lot twisted (although with a pretty UI).
I'm confused how these two product stack up against each other. Googling and searching MSDN didn't reveal much information either.
What are the differences between them and the target use-cases? Are they expected to be merged into one product down the road?
The use case for us is a WebRole that's running as a cloud service, whose REST/Web API services are consumed by machines on a private network. Azure Connect or Azure Virtual Network would (should?) provide the underlying connectivity between them.
Azure Connect allows users to connect Azure applications with on-premise servers in a super simple and quick way. It does not require VPN devices, it does not require user to have network knowledge, it does not require/assume user have access to network infrastructure (e.g. ability to configure the firewall at company's edge firewall). You express your connectivity intent (e.g. Azure service x should connect to a set of machines (machine group) y on-premise) in the management portal, Azure Connect does the rest for you. It is also very flexible in that you can change the network and connectivity policy at any time via the portal, without requiring redeployment of your app or any change on-premise. e.g. you can make Azure service x to connect to machine group z on-premise instead of y, once you make that change in portal, the rest happens automatically, machines in y are not long accessible to/from Azure. Azure Connect uses endpoint software to manage all the network connectivity for users, so you do have to install endpoint software. But it supports many different automatic deployment options including using Microsoft Update.
Azure Virtual Network allows user to extend part of their on-premise infrastructure to your Azure virtual network via standard site-to-site IPSEC connection. You must have an internet facing VPN device at on-premise side. The solution also assumes you have network knowledge - you will be asked to specify the network address range you will be using at both Azure and on-premise sides, you will must launch a VPN gateway at Azure side and manage the IPSEC connection. It does not require install endpoint software on servers, you are responsible for setting up routes to route the traffic from VPN device to servers and vice versa.
The two technologies complement each other, they are suitable for different scenarios.