Proxy servers have been around practically as long as the internet itself, but their usage has evolved over time. They were initially used primarily as a caching tool.

Today, proxy server applications have expanded and are now considered an essential business tool, offering critical benefits in cybersecurity, network performance and market research. 

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I recently tested and reviewed the best proxy servers for CNET and got an up-close and personal look at which are better than others. If you're interested in using a proxy server for your business, we'll go over some of the most common ways you can use it to improve your security, performance and competitive intelligence. 

Strengthening cybersecurity

One of the primary reasons for a business to use a proxy server is to protect the data of its employees and improve its institutional security. The proxy server essentially acts as a buffer between the company and the outside world. 

Where most proxy servers traditionally route your traffic through another IP on the way out, these reverse proxy servers sit in front of web servers to manage traffic coming in. This is an especially attractive option in corporate environments where companies want to protect their internal networks. 

"Corporate environments that have websites don't want those IP addresses exposed, so they'll have a reverse proxy at the front end of that so that the source that's trying to get to those servers is not going to see the server address," said Erik Avakian, a technical counselor at Info-Tech Research Group and the former chief information security officer for the Commonwealth of Pennsylvania.

Using this type of proxy server can offer other cybersecurity benefits for businesses, including the encryption and decryption of Secure Sockets Layer or Transport Layer Security data. Doing this for each individual client can be expensive and consume a lot of resources.

A reverse proxy allows businesses to offload some of this computationally intensive work from the server and onto the proxy itself.  

Improved performance and bandwidth saving

In addition to security use cases, proxy servers can also optimize network performance of businesses by caching frequently accessed web pages and files. These resources are stored locally instead of at the original source. This is particularly useful for companies with broad employee bases, as it can reduce load times, latency and bandwidth consumption.

Another key benefit here is load balancing. This enables businesses to distribute traffic around multiple backend servers, instead of funneling it all through one. With this type of setup, businesses also have added protection against site shutdowns, as traffic can be rerouted to a different server if there's an outage or attack on the network.  

Employee management and content control

Proxy servers can protect businesses in both directions: by restricting the content coming inside their walls and masking their employees' IP addresses on the way out. The first avenue is essentially a way to moderate which types of content employees can access from their company's network.

"Companies use proxies to restrict internet traffic from their end users," Avakian said. "Corporations may want to block certain types of websites."

In addition to this content filtering, proxy servers set up on a business's network will also protect the company by masking its IP addresses. If an employee accesses a malicious website, a proxy server can mitigate how much information is able to be accessed.

"Traffic doesn't look like it's coming from your computer. It's coming from the proxy," Avakian said. "Corporations don't want people over the internet to see their IP addresses, so they're going to put it through a proxy first."

Social media management

Proxy servers are often used to avoid being blocked when sending too many requests from a single IP address, and social media platforms are among the main use cases.

Most social media companies allow around five accounts per IP, and excessive activity from a single IP can trigger a ban or suspension from platforms like Instagram, Facebook or TikTok. 

"A lot of folks are using proxies to manage 30 different social media accounts," Avakian said. "Some of the social media companies restrict that, but if you use proxies, you're able to do that."

But proxies aren't just useful for businesses looking to manage multiple accounts. They can also help with gathering market research data. With many companies using location-based marketing strategies, proxy servers give them the ability to change location to access content available in different areas. They also allow for large-scale web scraping across social media platforms. 

Many proxy companies even offer specific tools for social media data collection. I was particularly impressed with Decodo, which comes with pre-built scraping templates.  

Web scraping

Web scraping is the most common business use case for proxy servers, and it offers several advantages. As with social media platforms, many websites block web scraping requests from a single IP address.

Proxy servers are the primary solution to help businesses circumvent this. One feature that stood out to me when reviewing Oxylabs' proxy servers was its advanced web-scraping tools, which allow you to do bulk data collection without getting blocked.

"Let's say you're trying to scrape data from your competitor's site. Maybe it's pricing data. You're doing research, basically," Avakian said. "You don't want it to look like you're scraping all of that from one source, because it's probably going to be blocked."

Proxy servers also allow you to change the location of the IP making the request, so you can gather localized data in specific markets or bypass geo-restricted content. 

Take internet service providers, for example. Many ISPs vary their pricing based on location. If you want to gather information on how much your competitors are charging for plans around the country, many proxy servers will let you choose locations down to the ZIP code level. 

Keep in mind, this type of workaround may violate a website's terms of service. The legality of web scraping is complicated, and I'm in no position to give legal advice on the matter. But this post from the Quinn Emanuel law firm gives some helpful background. 

"Web scrapers and those who host or rely on scraped personal data also should be aware of all applicable privacy regulations governing their activity and seek legal advice to ensure that they are complying with these regulations," the firm says.

Reasons a business would not want to use a proxy

While proxy servers offer numerous advantages, there are several reasons why a business might choose not to use one:

• Cost and complexity: Proxy servers can be expensive, with many starting at around $4 per gigabyte, and they require some technical proficiency to set up and use. If you don't have a dedicated IT specialist on your team, there might be a bit of a learning curve to getting started. 
• Potential performance bottlenecks: While proxy servers can give you performance improvements through caching, they can also slow down your internet speed as traffic is routed through a separate server.
• Single point of failure: If you're using a single proxy server for security or content filtering, you run the risk of having your entire network crash if there's an issue with the proxy. This can be mitigated by using multiple proxy servers with automatic failover.
• Privacy concerns with third-party providers: Web scraping violates some websites' terms of service, and using a proxy server to get around them could open you up to legal liability. When in doubt, consult a lawyer to ensure you're complying with legal regulations.  

The bottom line

Proxy servers have a number of legitimate use cases for businesses, from cybersecurity protection to market research. Before signing up for a proxy server, it's important to know what kind of activities you need it for, how many IP addresses you'll require and what tools will be useful for your business. You can find more information at CNET's guide to the best proxy servers.