A LAN is basically interconnection of several computers by communication lines within a geographical limit. It may be described as a group of computers and other systems located reasonably close to one another, connected via communication links to share computing resources such as printers, storage devices etc.

Also it can be defined as LAN is a network of computers connected by specific type of transmission media (cables etc.) and network interface cards and control by any of a number of network operating systems that support all necessary communication protocols & standards.

LAN today acts as a problem solver. To allow communication, information sharing, collaboration among different users, LAN can be used. LAN is typically used in a small area, say, a building or an office complex. The need for LANs really cropped when PCs appeared on the computing scene. The hard disk drives and printers were expensive and most organizations could not or did not want to afford a large hard disk or a printer for every PC.

The disk server was the first real example of resource-sharing. It allowed a few PC users access to a single common hard disk drive. The operating system used on the first disk server was CP/M. CP/M was the force-runner to DOS, the most popular operating system today.

The software used with the disk served divided the hard disk into volumes. Each volume acted like a private hard disk drive (logical drive) for a specified user. The software also created a public volume that could be accessed by all users.

Today, disk servers have been replaced by File Servers. On a file server, the need to know which volume stores which file does not exist. Further, a file servers also allows two different users to share the same file. Unauthorized access can, however, be prevented very effectively using the different security features that a file server provides. A point to be noted before we discuss anything more is that there are many different versions of LAN being sold in the market by many different vendors. Most of the LANs support live or more terminals. There are LANs which support even one hundred terminals.

The figure shows several terminals attached to the file server. In many networks these terminals, can be either dumb or intelligent. A dumb terminal is nothing but a keyboard and monitor and a small interface unit which links it to the host computer. The used siding at the dumb terminal can access the host, but since the terminal does not have a hard disk or a floppy disk drive he has to store all his data on the file server itself. In fact, the dumb terminal does not have a hard disk or a floppy disk drive he has to store all his data on the file server itself. In fact, the dumb terminal does not have any processing power.

An intelligent terminal however is just like a PC (in fact a PC, in most cases), with its own processor, memory and hard-disk drive. It can be used to work with the files stored in the host or it can even work as a stand-alone unit. In a LAN however, every terminal is intelligent.