What Is a Local Area Network (LAN)?

A local area network (LAN) is a group of interconnected computers that share the same geographic location, such as an office. This is opposed to a wide area network (WAN), which connects computers over greater distances, and would be used to link branch offices.

Each computer connected to

a LAN can be configured to be able to access the other connected computers' hard drives, as if they were installed internally. Also, you can connect your LAN to a file server, which is specifically designed to house shared files and resources for all the networked computers to access.

The Hardware
The most common type of networking standard is Ethernet, which encompasses a number of variations. Current Ethernet standards are 10BaseT, which transmits data at up to 10Mbps; 100BaseT, which operates at up to 100Mbps; and the newer 1000BaseT, which reaches speeds up to 1000Mbps.

The hardware that makes up an Ethernet LAN consists of the following devices:

• PCs. To set up a LAN you'll need to connect at least two computers.

• Cable. Earlier Ethernet networks used coaxial cable, though now the most common type is CAT-5, a twisted-pair type of cable that looks like a jumbo version of a typical telephone wire. The CAT-5 cable plugs into the network adapters in each computer, then into a switch.

• Switch. Switches are intelligent devices that have anywhere from four to several hundred ports that you plug your computers' cables into. The switch is the point where all the computers are connected.

• NICs. Each networked computer will need a network interface card (NIC).

The Software
Besides having the right hardware devices, you must also install a software networking protocol. The most commonly used protocol is Transmission Control Protocol/Internet Protocol (TCP/IP), the same one used for the Internet. Most Windows and Macintosh systems come with TCP/IP preinstalled, so once you have the right hardware in place, you only need to configure the networking properties.

If you're convinced of your need for a LAN, make sure that you have your small business network server security covered.