What is a LAN? Understanding Local Area Networks

What is a LAN?

A sophisticated network for sharing data, LANs were built to enable fast data transfer in a small geographical area. Also known as a Local Area Network, LANs meet connectivity needs in homes, office buildings, schools and colleges, shopping malls, university campuses, etc. Users prefer LAN due to its affordability and easy access.

What is a LAN?

LAN refers to a group of computers or other devices connected via Wi-Fi or Ethernet, situated in a single physical location.

The most common example of a LAN can be found in your home. Your internet service provider provides you with a modem or a router. You then connect multiple devices like PC, smartphones, tablets, printers wirelessly or via a cable.

A local area network, or LAN, is established by the router which connects all your devices. Then, the router connects your LAN to the WAN, the Wide Area Network which your internet service provider provides.

LANs don’t have to be limited to a room – they can be relatively large and take up the entire building. However, it is more accurate to classify them as WANs or Wide Area Networks in such a scenario.

All the devices on a particular LAN get shared access to files over the same internet connection. A router creates an IP address for each device on the network and facilitates a shared internet connection.

You can connect various devices on a LAN network, including desktop computers, printers, IoT devices, laptops, gaming consoles. In companies, LANs are used by internal employees to gain shared access to printers and servers.

How do LANs Work?

The central point of internet connectivity for a LAN network is a router. Residential spaces use a single router, while large commercial areas may use switches instead of a router for more efficient data transfer.

LANs mostly use Ethernet or Wi-Fi to connect multiple devices. Ethernet is essentially a network protocol that uses Ethernet cables to establish physical network connections. On the other hand, Wi-Fi is another protocol that connects to the network via radio waves.

Importance of LANs in a Business

Local Area Networks provide various advantages in the corporate world:

  • Reduced Expenses: LANs offer significant savings in Local Area Network hardware costs and efficient resource pooling.
  • Improved Storage Capacity: By consolidating all data into a single data storage server, the number of storage servers required is reduced while operational efficiency increases.
  • Increased Flexibility: Data can be accessed by any device from any location using an Internet connection.
  • Streamlined Communication: Files and communications can be shared in real time and accessible from any device at any time.

What is a Virtual LAN (VLAN)?

Virtual LANs divide the traffic received on one physical network into two networks. In theory, it looks similar to setting up two different LANs in the same room, each with its router and internet connection.

Virtual LANs have one key difference in this setup: they are distinguished virtually using software instead of physically through separate routers.  Virtual LANs are indispensable in large networks, helping to manage the network better by virtually segmenting it into smaller, more manageable segments. This sub-division allows for more effective management and troubleshooting.

The rising need for virtualization has boosted the demand for virtual LANs wherein network administrators can logically group network nodes and create divisions without making significant changes in the physical network infrastructure.

For example, an organization with multiple departments such as accounting, marketing, and IT support can have their devices physically connected to the same switch.  However, by using virtual LANs, they would be segmented to behave as if they were independent.

Understanding the difference between a LAN & a WAN

WAN is a wide-area network made up of interconnected LANs. The primary difference between these two topologies is that LANs are limited to a small geographical location, while WANs can spread thousands of miles.

Local area network (LAN)
Wide area network (WAN)
Best suited for homes, offices and schools
Covers cities, states and nations
Privately owned
Privately or publicly owned
Higher speed than WAN
WAN speed is slower than LAN
Less congestion and traffic
More congestion
Better fault tolerance
Lower fault tolerance
High data transfer rate
Lower data transfer rate
High bandwidth
Low bandwidth
Easy maintenance
Difficult maintenance
Safer security than WAN
By nature and scope, less safe than LAN
Shorter propagation delay
Propagation delay longer than LAN
Works on the broadcasting principle
Operates on the point to point principle
Information is transmitted via coaxial or UTP cable
Data is transmitted via PSTN or satellite link
Best example – Network in a corporate building
Best example – The internet

What equipment is required to deploy a LAN?

Simpler LANs need only two things – a router and a way for computing devices to connect to that router via Wi-Fi or Ethernet cables. Bigger LANs, such as in a corporate building, may need patch panels. What you’ll need to set up a LAN:

  • Network Router – Network routers, as opposed to switches and hubs, are used to connect networks rather than connecting computers inside a single network.

Routers can connect computer networks that are separated by a physical barrier such as a wall or an ocean. They are most typically encountered in the house, where they let home PCs can connect to the Internet; but, they can be used to link any type of network.

The majority of modern network routers are actually combo units that include a router and a network switch, as well as a few other networking-related functions like a DHCP server and a firewall, and modem.

  • Ethernet Switch – Switches are a modern networking technology that assigns a unique MAC address to each computer on the network. This enables LANs to route information to individual computers using a network switch. Because network switches do not broadcast to every computer on the network, they can allot their entire bandwidth to each computer at the same time.

An ethernet switch extends the ability of your network to connect an additional 4 to 24 devices. It does so by splitting the internet connection between multiple devices.

  • Ethernet cables – You may have to stock up on Ethernet cables that connect to devices in your network.

Network cables are the physical wires that transport data between computers in a wired LAN. CatX—where X is the category number—cables are widely used to refer to the cables that are identified by category.


Ethernet cables are available in varying lengths. Most modern networks are compatible with Category 5 or Category 6 cables.

In an extensive network, it’s better to buy cables in different colors so you can distinguish between other network devices. For example, you can use red cables for servers and blue ones for PCs and so forth.

  • End-User Devices With Interface Cards – Laptops, PCs, and tablets are all end-user devices that you would need. They should have a Network Interface Card (NIC) to connect to Ethernet and Wi-Fi.

Setting up a Local Area Network

The benefits of LAN networking include the ability for devices to communicate with one another without the need to connect them individually to the internet via modems and cable or wireless connections. Determine which devices must be linked and how they must be connected, assemble the necessary equipment, and begin working.

Planning Your LAN

Begin your local area network setup by determining which devices will be connected to the network. You may need to connect several types of devces, such as laptops, tablets, printers, smart TVs, and other devices, for example. Examine the device documentation to determine how they can be linked, such as whether they require wired or wireless connections or can function with both.

Then, think about where the gadgets will be placed. You may be able to utilize a single wireless router and access point if they are all in a small area and wirelessly connected, but if they are distributed over a larger region, you may need more access points or a wireless repeater to obtain a good signal.

Consider how the LAN will connect to the internet. If you don’t have an internet provider, you should look for one that can give the speed and capacity you require at a reasonable price.

Consider whether you will acquire wireless routers, cables, and a modem from your internet provider or if you will need or want to buy them yourself. Examine what equipment your provider provides and at what cost, as well as whether you can obtain a better deal elsewhere.

Related: Business Broadband – Choosing the best internet service for your business

Wireless or Wired LAN, or both?

You might want to connect some devices via wired Ethernet cables, which can provide faster connectivity with fewer interference. If you choose that route, figure out how many cables you’ll need, what lengths you’ll need, and where you’ll need to run them.

It may be OK to put Ethernet cables under tables or along the walls for a small home or office connection, but for a more advanced LAN setup, you may wish to install wires beneath the floor or within the walls. If you’re thinking about going that path and don’t want to do it yourself, you might want to consult a construction specialist.


See Also: Advantages and disadvantages of wireless networks

Setting it all up

You’ll need to set everything up once you’ve planned everything out and have all of your equipment in place. Follow the on-screen directions to connect your modem to the internet and attach any cords that are required. In general, devices connected via wired connections will automatically configure themselves on your network, but read their documentation to determine if they require any additional configuration.

Then, turn on any wirelessly connected devices and follow the LAN configuration instructions in their documentation to input wireless network names and passwords and bring them online. Check that you can access the internet from all devices, and that you can connect to and utilize devices such as printers.

Troubleshooting and Maintenance

If you have any problems connecting to a network, either when you first set it up or afterwards, consider unplugging the device from the LAN and reconnecting it. If the device is connected wirelessly, try a new cable to see if that is the issue, or move it closer to the router.

If everything else fails, consider contacting the device’s manufacturer for assistance.

Securing a Local Area Network

The majority of Local Area Network problems and solutions are related to security. There are several approaches to designing a secure Local Area Network. Installing a firewall behind a single access point, such as a wireless router, is a typical solution. Another useful approach is to employ security protocols such as WPA (Wi-Fi Protected Access) or WPA2 to encrypt passwords on incoming Internet data.

Related: Wi-Fi security: Securing your wireless network

Using customized authentication policies, network administrators can analyze and filter network traffic to prevent unauthorized access. VPNs and other technologies can be used to secure specific access points. Installing antivirus or anti-malware software might help to manage internal Local Area Network security.

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