What is a LAN? Here’s Everything You Need to Know

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What is a LAN? Here’s Everything You Need to Know

Srijani Ghosh
Last updated on May 30, 2024

    A network or computer network has made it possible for people to share resources and communicate quickly without meeting in person. In general, a network is a collection of two or more computer systems connected together in a particular location.

    There are three major types of networks, namely LAN, WAN, and MAN. A LAN connects multiple computers within a small geographic area. A WAN is a network that connects two or more computer systems within a large geographic area. Lastly, a MAN is a network that connects multiple computers within a metropolitan area.

    Well, this article primarily focuses on expanding your knowledge of LAN. It walks you through the definition of LAN, types, advantages, and disadvantages.

    So, let us get started!

    What is a LAN?

    LAN stands for Local Area Network. It is a type of network that connects multiple computers within a small area, such as a building, school, home, or office. It can serve both small and large groups of people, i.e., one user at home to thousands and hundreds of users in the office or school.

    A local area network (LAN) primarily uses TCP/IP Ethernet or WiFi to interconnect computers. Ethernet is a wired computer networking technology and IEEE standard that enables computers within a network to communicate with each other. On the other hand, WiFi is a wireless technology that uses radio waves to connect computers within a network.

    Earlier, various technologies were popularly used in a LAN, including Fiber Distributed Data Interface (FDDI), token ring, and Attached Resource Computer Network (ARCNET). However, Ethernet and WiFi have become popular these days because of their faster data transfer speeds and lower installation costs compared to other technologies.

    A LAN consists of various components, including switches, routers, cables, and access points to connect to internal servers, websites, and other LANs within the same Wide Area Network (WAN).


    The increasing usage of computers in universities and laboratories has resulted in the demand for high-speed connections between computer systems. In the 1970s, several commercial LAN technologies came into existence. The year 1974 witnessed the development of the Cambridge Ring at Cambridge University.

    Between 1973 and 1974, Dr. Robert M. Metcalfe invented Ethernet at Xerox PARC. He was in charge of connecting all the computers in a building and to the world’s first Xerox laser printer. He used a huge coaxial cable to connect multiple computers in a building and named it Ethernet.

    Furthermore, the Datapoint Corporation developed ARCNET in 1976 and released it in 1977. The first commercial installation of ARCNET was at Chase Manhattan Bank, New York in 1977.

    In 1985, Ethernet became the IEEE (Institute of Electrical and Electronics Engineers) standard for LAN. Later, Ethernet started using twisted pair cable, which significantly reduced crosstalk and was faster. And today, it is a primary technology for connecting multiple computers to form a network within a small area.

    IEEE started working on developing wireless LAN and released IEEE 802.11 (WiFi) standard in 1997.

    Types of LAN

    Generally, there are two types of LANs, namely client/server LANs and peer-to-peer LANs.

    1. Client/Server Local Area Networks

    A client/server local area network involves a number of clients or devices connected to a single central server. This server is responsible for managing application access, file storage, network traffic, and device access.

    Here, a client can be any device connected to the server, either with cables or through wireless connections. Any client over a network can access databases, emails, other resources, and services running on the server.

    This type of local area network is ideal for mid-size to large-scale businesses, government offices, or schools.

    2. Peer-to-Peer Local Area Networks

    Unlike a client/server LAN, a peer-to-peer network is not capable of handling heavy workloads and does not have a central server. In this type of LAN, all the computers over a network share tasks and workload equally. It means that all the computers over a network have equal permissions and responsibilities for processing data. Moreover, these computers connect through wired or wireless connections.

    Essential Components of a LAN

    A local area network is made up of various hardware components, including routers, switches, networking interface cards, cables, and access points. Let us discuss the major components of a local area network below.

    1. Network Interface Cards (NICs)

    Each device within a network has a network interface card (NIC). Basically, it may be a circuit board installed into a computer’s slot or may be built into a motherboard to connect to a network. Therefore, a network interface card acts as a bridge between the network and the computer system.

    Moreover, a network interface card of each computer is responsible for deciding whether to pass a specific data packet on the system or discard it based on its destination address.

    2. Hubs

    A hub brings all the network cables together, i.e., it is a central wiring connector in a local area network. A hub consists of multiple ports, and each cable plugs into a port on a hub. The primary responsibility of a hub is to send and receive data packets between the network and all the connected devices.

    3. Switches

    A switch is similar to a hub. A hub is a central point for all the connecting network cables, while a switch is only able to receive a data packet and forwards it to its respective destination address. It is responsible for managing the flow of data packets in a network.

    Moreover, you can identify each device connected to a switch using its network address. A switch manages the flow of traffic and maximizes the security and efficiency of the network.

    4. Routers

    A router is essentially a smart switch that has an idea about other LANs, while a switch knows only about the network it is connected to. It is responsible for connecting multiple local area networks, forming a wide area network. In addition, a router transmits data packets between computer networks.

    In short, a router connects multiple networks, while a switch connects multiple devices over a network.

    5. Access Point

    An access point creates a wireless local area network. It connects to a wired router and a switch or hub through the Ethernet cable and provides a WiFi signal to a specific area. For example, if you want to enable WiFi access in a particular office area but don’t have a router within that range, you can install an access point in that area and connect it to a router, switch, or hub through the Ethernet cable.

    6. Network Software

    Once all the hardware components are in place, network software is required to make all those components operational. Network software is an umbrella term for various types of software that manage and streamline the design, implementation, operating, and monitoring of computer networks.

    Usually, network software performs the following functions:

    • Helps in installing and setting up computer networks.
    • Provide network administrators with authority to allow or deny users access to the network.
    • Assists users in accessing resources seamlessly.
    • Helps network administrators to protect the network from data breaches and other attacks.
    • Defines data storage locations and allows users to access that data.

    LAN vs WLAN

    A LAN is categorized into two types based on the connection between devices, namely wired local area network and wireless local area network. A wired LAN leverages switches and Ethernet cable to connect servers, endpoints, and the Internet of Things (IoT) devices to a network.

    On the other hand, a wireless LAN leverages the IEEE 802.11 (WiFi) standard to transmit data between the devices and the network through a wireless spectrum.

    The following table highlights the major differences between a wired and wireless LAN:

    Local Area Network Wireless Local Area Network
    A wired local area network connects multiple computers and other network devices using wired connections. A wireless local area network is a group of computers and other networking devices that form a network using radio transmissions.
    Wired local area networks are less expensive. Wireless local area networks are more expensive.
    They are more secure than wireless local area networks. They are not as secure as wired local area networks.
    The installation of wired local area networks is complex. The installation of wireless local area networks is simple and easy.
    They provide good performance, and the impact of weather is limited. They provide high performance but may get impacted due to bad weather.
    Wired local area networks are less mobile. Wireless local area networks are highly mobile.
    They are free from external attacks, such as interruption of signals, cyber-attacks, etc. They are more vulnerable to external attacks.
    Example: A wired or wireless network at the office, allowing employees to communicate and share data and resources. Example: Laptop, mobile phones, and tablets connected to a hotspot or wireless router.

    Advantages and Disadvantages of a LAN

    Let us now discuss some significant upsides and downsides of using a local area network.


    • Resource Sharing: A local area network makes it possible to share resources, such as printers, DVD drives, and hard disk drives, between the interconnected computers. All the resources can be connected to a single computer, and all other computers over a network can access them whenever needed.
    • Software Sharing: In a local area network, you can install the licensed software on one computer, and all other connected computers over a network use that software. It eliminates the need to purchase the license for each computer over the network.
    • Centralized Data: All the data of users over a network is stored on the hard disk drive of a server computer. Therefore, individuals can use any computer over a network and access the required data from the server computer by logging in to their respective accounts.
    • Fast and Convenient Communication: A local area network makes it convenient to share data and exchange messages between interconnected computers.
    • Updated Information: Since data is stored on a server computer, all the computers connected to the server receive the updated information in case of any changes or modifications to data on the server.
    • Computer Identification: Each computer on a local area network is assigned a MAC address . Using this MAC address, you can uniquely identify a particular computer in a network. Moreover, the MAC address of a computer is useful while sending and receiving data packets.
    • Internet Sharing: A single computer having an internet connection can share it with other computers in a local area network.


    • Implementation Cost: A LAN saves a lot of money because of resource sharing and software sharing. However, the initial cost required for setting up a local area network is high. It is due to the requirement for various hardware components, including routers, switches, cables, and hubs.
    • Security: It is pretty easy for hackers to gain access to data stored on the server computer of a LAN. Therefore, it is the sole responsibility of the network administrators to avoid unauthorized access to the centralized data of the network. They have to properly implement the privacy policies to maintain the security of the centralized data.
    • Maintenance: Since a local area network comprises many hardware components, they may fail or crash for some reason. Therefore, network administrators have to monitor and maintain those components regularly.
    • Area Coverage: A local area network has a less coverage area of up to 10 km. It can only cover a small office, building, bank, or school.
    • Server Crashes: A server computer in a LAN manages all the computers connected to it. If a server experiences any fault or fails unexpectedly, all the connected computers get affected.
    • Privacy Violations: A network administrator can check the personal data files of every user of a LAN, which leads to privacy violations.


    Here we reach the end of our discussion on the local area network (LAN). A LAN is a type of network that connects multiple computers either with wired or wireless connections within a small geographic area. The two primary and common technologies used in a local area network to connect multiple computers are Ethernet and WiFi.

    A LAN enables resource sharing, software sharing, and internet sharing. It makes communication between interconnected network devices convenient and fast. However, if a server computer fails, all other connected computers also get affected.

    Through this article, we have helped you to understand a local area network, its types, various components, and the difference between wired and wireless LANs. If you have any queries or doubts, feel free to share them in the comments section below.

    Frequently Asked Questions

    1. What is a WAN?

    WAN stands for Wide Area Network. It is a collection of multiple LANs and other networks. In other words, it is a network of networks. Unlike a local area network, a wide area network covers a large area, such as a city, state, or nation.

    2. What is the primary difference between a LAN and a WAN?

    The primary difference between a LAN and a WAN is the geographic area they cover. A local area network covers a small area, such as a building or school, while a wide area network covers a large area, such as a city, state, or country.

    3. Is the Ethernet port the same as the LAN port?

    Yes, the Ethernet port is the same as the LAN port. Both the ports refer to the same socket on a computer, switches, WiFi routers, servers, and other network devices.

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