What is LAN (Local Area Network )?

A local area network (LAN) is a computer network (a set of nodes that are connected to each other to share resources) spread over a small geographical area. A local area network may serve as few as two or three users (for example, a small home office), or several hundred users spread across a group of buildings (for example, a university campus or a large organisation). Intranet in a university or an office is an example of local area network.

LAN or Local Area Network Definition

Typically, in a local area network, a group of host computers share a server within a small geographical area. The nodes can be connected over a cable (Ethernet) or using wireless technology (Wi-Fi). They will be sharing resources as such as storage space on the server or network printer.


Multiple local networks may function alone, disconnected from any other network. However, some LANs may form a connection to other LANs. For example, if an organisation has offices spread over different countries in the world, each office location can have a local area network.

To facilitate communication between any two offices, LANs of each office would be connected and can communicate with the other offices. Some local area networks also connect to a wide area network (WAN) such as the internet.

Advantages of local area networks

Setting up local area networks in big organisations require specific devices such as hubs, switches and routers. Organizations invest in all the hardware and setup because local area networks offer many advantages such as:

Fast data sharing

The file sharing become very fast in a local area network. It also allows for better collaboration between colleagues, saving time and increasing productivity.

Centralization of data

Using a client-server model allows for centralization of databases. This ensures consistency of your data and less effort goes into maintenance and updating of the databases.

Resource sharing

With the centralization of the data, duplication of data can be avoided. This means, less investment in hardware making this a cost-effective solution.


For organisations such as a hospital, finance companies, etc., security of data is of utmost importance. By using a stand-alone local area network, companies can restrict public access of data. This makes it less prone to hackers and data theft.

Type of local area networks

Designing a local area network depends on a lot of factor such as the size of the organisation, hardware used, the arrangement of devices, etc. The following characteristics differ one LAN from another:

Network topology

Network topology refers to the arrangement of the different nodes in a communication network. Based on the requirement, nodes can be arranged in a ring, star, mesh, tree or straight line.

Network protocols:

A network protocol is a set of rules or guidelines followed by the network for communication. Some networks use basic data communication protocols such TCP/IP (Transmission Control Protocol/Internet Protocol), HTTP (Hypertext Transfer Protocol), etc.

while some networks prefer to implement a layer of security. These protocols include HTTPS, SSL, SFTP.

Network architecture:

Network architecture regulates the functional organisation of nodes in a network, its operational principles and procedures including what data formats will be used. A network can follow a client/server architecture where one node acts as the primary server where all the data is stored.

All the other nodes send their requests to this node. A network can also be based on a peer-to-peer network architecture where data is distributed over different nodes.

Connection hardware:

In a local area network, devices can be connected by using coaxial cables, twisted-pair wire, or fibre optic cables. Devices can communicate wireless, sharing data using radio waves (Wi-Fi)


How to set up a local area network?

For setting up a local area network, all the hosts should be equipped with network interface card (NIC), also referred to as an Ethernet card or network adapter. This piece of hardware is an expansion card that allows computers to join a network. If your network follows a client-server model, you’ll require to set up a central node.

Next, to connect the nodes, you’ll need a central device such as a hub, router, bridge or a gateway.  If deploying a wired network, connecting wires are also required.


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