In the modern office environment, each worker is equipped with a personal computer, containing its own disk drives and processor. Each of these computers can communicate with another by the way of a local area network (LAN), which is a computer network that covers a small area, usually a single building or group of buildings. In addition, the LAN may also connect the network of computers with a series of printers, a mainframe computer or file server with even greater processing power and memory storage, and with other devices that can send messages from the network over telephone lines to another location.

As the name suggests, a LAN is local, meaning that it is a proprietary system limited to a finite number of users. It generally serves an area of less than one mile. It is also a network, affording users both functional and communicative diversity through a distribution of resources. A LAN permits workers—isolated in separate offices—to operate off the same system, as if they were all sitting around a single computer.

One of the great attributes of a LAN is that it may be installed simply, upgraded or expanded with little difficulty, and moved or rearranged without disruption. LANs are also useful because they can transmit data quickly. Perhaps most importantly, anyone familiar with the use of a personal computer can be trained to communicate or perform work over a LAN. But despite their great potential and capabilities, LANs have yet to demonstrate an increase in office productivity. They have certainly eliminated paper and speeded the flow of information, but in many cases they have also created additional work in terms of organization, maintenance, and trouble-shooting.


The advent of personal computers changed the type of information sent over office computer networks. Terminals were no longer "dumb," but contained the power to perform their own instructions and maintain their own memories. This took considerable pressure off mainframe devices, whose energies could now be devoted to more complex tasks.

LANs allowed for the transmission of data between workers. In turn, they enabled this shared data to be directed to a common printer, serving a larger group of users. This eliminated the need for each worker to have a printer and ensured that the one printer provided was not underutilized. In addition, LANs allowed data to be called up directly on other workers' computers, providing immediate communication and eliminating the need for paper. The most common application was in interoffice communications, or electronic mail (e-mail). Messages could be directed to one or several people and copied to several more over the LAN. As a result, an e-mail system became something of an official record of communications between workers. Addressees became obligated to respond to e-mail messages in a timely manner because their failure to answer could be easily documented for supervisors.

Personal computers transformed LANs from mere shared processors to fully integrated communication devices. With processing power distributed among several computers, the mainframe's main role was eclipsed and complex processing, administrative functions, and data file storage became the job of a new device, the file server. Today, there are many different types of LANs. For example, many Macintosh computers use Appletalk, while IBM computers commonly use Ethernets.


The physical properties of a LAN include network access units (or interfaces) that connect the personal computer to the network. These units are actually interface cards installed on computer motherboards. Their job is to provide a connection, monitor availability of access to the LAN, set or buffer the data transmission speed, ensure against transmission errors and collisions, and assemble data from the LAN into usable form for the computer.

The next part of a LAN is the wiring, which provides the physical connection from one computer to another, and to printers and file servers. The properties of the wiring determine transmission speeds. The first LANs were connected with coaxial cable, the same type used to deliver cable television. These facilities are relatively inexpensive and simple to attach. More importantly, they provided great bandwidth (the system's rate of data transfer), enabling transmission speeds initially up to 20 megabits per second.

Another type of wiring, developed in the 1980s, used ordinary twisted wire pair (commonly used for telephones). The primary advantages of twisted wire pair are that it is very cheap, simpler to splice than coaxial, and is already installed in many buildings. The downside of this simplicity is that its bandwidth is more limited.

A more recent development in LAN wiring is optical fiber cable. This type of wiring uses thin strands of glass to transmit pulses of light between terminals. It provides tremendous bandwidth, allowing very high transmission speeds and because it is optical rather than electronic, it is impervious to electromagnetic interference. Still, splicing it can be difficult and requires a high degree of skill. The primary application of fiber is not between terminals, but between LAN buses (terminals) located on different floors. As a result, fiber distributed data interface is used mainly in building risers. Within individual floors, LAN facilities remain coaxial or twisted wire pair.

When a physical connection cannot be made between two LANs, such as across a street or between buildings, microwave radio may be used. However, it is often difficult to secure frequencies for this medium. Another alternative in this application is light transceivers, which project a beam of light similar to fiber optic cable, but through the air rather than over cable. These systems do not have the frequency allocation or radiation problems associated with microwave, but they are susceptible to interference from fog and other natural obstructions.


LANs are designed in several different topologies, or physical patterns, connecting terminals. These shapes can range from straight lines to a ring. Each terminal on the LAN contends with other terminals for access to the system. When it has secured access to the system, it broadcasts its message to all the terminals at once. The message is picked up by the one or group of terminal stations for which it is intended. The branching tree topology is an extension of the bus, providing a link between two or more buses.

A third topology, the star network, also works like a bus in terms of contention and broadcast. But in the star, stations are connected to a single, central node (individual computer) that administers access. Several of these nodes may be connected to one another. For example, a bus serving six stations may be connected to another bus serving 10 stations and a third bus connecting 12 stations. The star topology is most often used where the connecting facilities are coaxial or twisted wire pair.

The ring topology connects each station to its own node, and these nodes are connected in a circular fashion. Node 1 is connected to node 2, which is connected to node 3, and so on, and the final node is connected back to node 1. Messages sent over the LAN are regenerated by each node, but retained only by the addressees. Eventually, the message circulates back to the sending node, which removes it from the stream.


LANs function because their transmission capacity is greater than any single terminal on the system. As a result, each station terminal can be offered a certain amount of time on the LAN, like a timesharing arrangement. To economize on this small window of opportunity, stations organize their messages into compact packets that can be quickly distributed. When two messages are sent simultaneously, they could collide on the LAN causing the system to be temporarily disrupted. Busier LANs usually utilize special software that virtually eliminates the problem of collisions by providing orderly, non-contention access.

The transmission methods used on LANs are either baseband or broadband. The baseband medium uses a high-speed digital signal consisting of square wave DC voltage. While it is fast, it can accommodate only one message at a time. As a result, it is suitable for smaller networks where contention is low. It also is very simple to use, requiring no tuning or frequency discretion circuits. This transmission medium may be connected directly to the network access unit and is suitable for use over twisted wire pair facilities.

By contrast, the broadband medium tunes signals to special frequencies, much like cable television. Stations are instructed by signaling information to tune to a specific channel to receive information. The information within each channel on a broadband medium may also be digital, but they are separated from other messages by frequency. As a result, the medium generally requires higher capacity facilities, such as coaxial cable. Suited for busier LANs, broadband systems require the use of tuning devices in the network access unit that can filter out all but the single channel it needs.


The administrative software of the LAN resides either in a dedicated file server; in a smaller, less busy LAN; or in a personal computer that acts as a file server. In addition to performing as a kind of traffic controller, the file server holds files for shared use in its hard drives, administers applications such as the operating system, and allocates functions.

When a single computer is used as both a workstation and a file server, response times may lag because its processors are forced to perform several duties at once. This system will store certain files on different computers on the LAN. As a result, if one machine is down, the entire system may be crippled. If the system were to crash due to undercapacity, some data may be lost or corrupted.

The addition of a dedicated file server may be costly, but it provides several advantages over a distributed system. In addition to ensuring access even when some machines are down, its only duties are to hold files and provide access.


LANs are generally limited in size because of the physical properties of the network including distance, impedance, and load. Some equipment, such as repeaters, can extend the range of a LAN. Repeaters have no processing ability, but simply regenerate signals that are weakened by impedance. Other types of LAN equipment with processing ability include gateways, which enable LANs operating dissimilar protocols to pass information by translating it into a simpler code, such as ASCII. A bridge works like a gateway, but instead of using an intermediate code, it translates one protocol directly into another. A router performs essentially the same function as a bridge, except that it administers communications over alternate paths. Gateways, bridges, and routers can act as repeaters, boosting signals over greater distances. They also enable separate LANs located in different buildings to communicate with each other.

The connection of two or more LANs over any distance is referred to as a wide area network (WAN). WANs require the use of special software programs in the operating system to enable dial-up connections that may be performed by a telephone lines or radio waves. In some cases, separate LANs located in different cities—and even separate countries—may be linked over the public network.


LANs are susceptible to many kinds of transmission errors. Electromagnetic interference from motors, power lines, and sources of static, as well as shorts from corrosion, can corrupt data. Software bugs and hardware failures can also introduce errors, as can irregularities in wiring and connections. LANs generally compensate for these errors by working off an uninterruptable power source, such as batteries, and using backup software to recall most recent activity and hold unsaved material. Some systems may be designed for redundancy, such as keeping two file servers and alternate wiring to route around failures.

Security problems can also be an issue with LANs. They can be difficult to manage and access because the data they use is often distributed between many different networked sources. In addition, many times this data is stored on several different workstations and servers. Most companies have specific LAN administrators who deal with these issues and are responsible for the use of LAN software. They also work to backup files and recover lost files.


When considering if a LAN is suitable for a business, several things must be considered. The costs involved and the administrative support needed often far exceed reasonable predictions. A complete accounting of potential costs should include such factors as purchase price of equipment, spare parts, and taxes, installation costs, labor and building modifications, and permits. Operating costs include forecasted public network traffic, diagnostics, and routine maintenance. In addition, the buyer should seek a schedule of potential costs associated with upgrades and expansion and engineering studies.

The vendor should agree to a contract expressly detailing the degree of support that will be provided in installing and turning up the system. In addition, the vendor should provide a maintenance contract that binds the company to make immediate, free repairs when performance of the system exceeds prescribed standards. All of these factors should be addressed in the buyer's request for proposal that is distributed to potential vendors.

LANs can also be purchased for home use. Initially, these kits were expensive and slow and transmitted data via the phone lines in the home. New products have emerged that is faster, more affordable and uses wireless technology such as radio waves to allow multiple computers to share printers and perform other LAN functions. This technology allows phone lines and LANs to be used simultaneously and is perfect for a small business owner that works out of his or her home.


A 1996 Business Week article estimated that only 70 percent of small businesses own PCS, and that of those, only 20 percent operate computer networks. But today, many companies offer products designed specifically to help small businesses install and use LANs simply and affordably. Many major software and network providers are planning products tailored toward the small business market as well. As a result, many more small businesses should soon be able to gain access to the advantages of LANs.


Arnst, Catherine, et al. "Wiring Small Business." Business Week. November 25, 1996.

Derfler, Frank J., and David Greenfield. "Beyond the LAN." PC Magazine. December 20, 1994.

Feltman, Charles. "A Reality Check on Virtual LANs." Business Communications Review. July 1996.

Green, Harry James. The Business One Irwin Handbook of Telecommunications. 2nd ed. Business One Irwin, 1991.

Seitel, Peter. "Realistic Expectations Are Linchpins of Decent LAN." Puget Sound Business Journal. September 16, 1994.

SEE ALSO: Wide Area Networks

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