Demystifying a Small Business Network

Running your business over a network -- even if it's only to share Internet access -- can help you be more productive and efficient. A look at the basic components of a network and how they all fit together.
Posted December 19, 2007

Joseph Moran

Joseph Moran

Whether your business is already running on a computer network or you're thinking about taking that step, understanding how a network works is more important than you might think. Even if you hire someone set up a network for you, understanding the basics will help when it comes time to buy a new piece of networking gear. You also need to understand what the person who sets up the network – whether it's an employee or local computer guy -- is talking about so you know you're getting the straight scoop.

We'll try to demystify things a bit for you by outlining the basic components of a typical network and explaining how they interact with each other. Don't think of it as networking for dummies, but rather as networking for those that just want the basics with a minimal amount of technical mumbo-jumbo.

A typical network starts with one or more computers linked together by special cabling through devices called switches. Switches connect to another kind of device called a router, and routers in turn connect to yet another device known as a broadband gateway. Since the broadband gateway is the lynch pin of many small business networks, we'll start with it and work our way forward (or backward, depending on your point of view) from there.

Broadband Gateways
These days most homes and small businesses get Internet access from either the local cable company or the phone company. A company that provides Internet access is known as an ISP, or Internet Service Provider.  In order for you to gain access to their network, an ISP provides a device generally known as a broadband gateway, (though it's also commonly referred to as either a cable modem or DSL modem depending on the type of service you have). If you think of the Internet as an interstate highway, the broadband gateway is essentially the exit to your network.  Most broadband gateways are ostensibly designed to connect to a single computer; if you've got a multiple computers that need access, that's where a router comes in.

The basic function of a router is to connect one network to another. Routers receive information, or traffic, from other networks and either deliver it to the correct computer or forward it on to another router for delivery. Organizations with very large networks often use multiple routers to link the networks of different departments (say, Sales, Marketing, and Human Resources), but in the context of a typical small business network, the router's job is to act as an intermediary between the company network, and that of the ISP.

Routers designed for small business networks usually have a security device known as a firewall built into them. Firewalls work by monitoring the traffic coming into the network and scanning it for potential threats. If any questionable traffic is detected, the firewall blocks it, preventing it from entering the company network.

Switches and Cables
The way computers link to a router and to each other to form a network is through devices called switches. (We'll set wireless networking aside for the time being, because we'll cover that in an upcoming article.) The actual physical connections are made with cabling -- commonly known as Category 5, or Cat 5-- which resembles conventional phone cord. (The two are actually quite similar, though network cable is thicker and uses a larger connector.) 

Computers connect to switches in a hub-and-spoke arrangement; think of it as a bicycle wheel, with the switch at the center and spokes (the cables) radiating from the center to the wheel's rim to each individual computer. Routers designed for home and small business networks typically have the switching technology built into it, so one device performs both functions. These combination devices let you connect at least four computers, and sometimes eight.

The overwhelming majority of network switches and cables are based on a technology called Ethernet, and there are two major types of Ethernet used today. The most common type is called Fast Ethernet, which can transmit a maximum of 100 megabits of data per second. By contrast, Gigabit Ethernet offers 10 times the performance, or 1,000 megabits per second. (Because of network overhead and other factors, the actual performance you get from either version of Ethernet is usually less than half the quoted figure.)

A Digital Post Office
Now that we've covered the physical components of network, lets take a look at how a networks enables computers to send and receive information. This is where several acronyms that we love to hate but need to know come into play.

IP Address
Just like you need a postal address in order to send mail from one location to another, computers also use addresses in order to locate each other and exchange information on a network. Computers identify and communicate with one another using IP (Internet Protocol) addresses, and every computer must have one to be part of a network.

IP addresses are numeric in nature and contain four numbers separated by periods (e.g. Each individual number in an IP address can range from one to 254, and while computers on the same network will have similar addresses, each address must be unique. Part of a computer's IP address refers to itself (like a house number) while the rest refers to the network a computer is on (like a street name).

Although you can assign specific IP addresses to individual computers (known as static, or unchanging, addresses), most networks use a technology called DHCP (Dynamic Configuration Host Protocol) to assign addresses automatically, greatly simplifying network management. With DHCP, a special server (a server is simply a computer or a piece of software running on a computer that performs a particular service or function) sets aside a group of IP addresses and doles them out as needed. When a computer wants to join the network, it requests an address, and the DHCP server (which is usually built into the router) issues an address to the computer.

When you want to connect a network to the Internet, you don't just get to randomly pick the IP addresses you want to use, but must instead use ones issued by your ISP. The problem is that most ISPs only provide customers with a single IP address with which to access their network. Normally that would mean you couldn't connect more than one computer to the Internet, but you can get around this limitation with a technology called NAT, or Network Address Translation, that allows multiple computers to access the Internet using a single IP address.

NAT, which like DHCP is built into a router, essentially creates two networks, one public and one private. The public network is the one with access to the ISP's network and the Internet beyond, while the private network contains the company's computers and other devices.

When Internet engineers first created NAT, they reserved a range of special IP addressed that people could access and use in the private network. Because the private network is set up using these IP addresses, computers on this network can't communicate directly with the Internet.

With NAT, a router not only acts as an intermediary, but also as a translator between the public network and the private one. It receives information requests from the computers on the private network and in turn forward them to the Internet via the public network.

The router also tracks the activity of all the computers linked to it, so that when a computer connected to the router requests information (say, a Web page) it can deliver that Web page to the particular computer that requested it. It's kind of like using a shopping delivery service; you tell the company what you want and where you live, and the item arrives without you having to go and get it yourself.

We hope this has helped you understand the basics of how a network works. Stay tuned for more articles explaining additional networking concepts.

Joe Moran spent six years as an editor and analyst with Ziff-Davis Publishing and several more as a freelance product reviewer. He's also worked in technology public relations and as a corporate IT manager, and he's currently principal of Neighborhood Techs, a technology service firm in Naples, Fla. He holds several industry certifications, including Microsoft Certified Systems Engineer (MCSE) and Cisco Certified Network Associate (CCNA).

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