What is data networking?

What is data networking?
Today, most companies, large and small, use data networking technology in their day-to-day business. An automobile parts manufacturer in Chicago sends electronic production reports to two separate manufacturing sites across two dedicated T-1 lines. A florist in San Diego uses an ISDN connection to the Internet to rapidly communicate with her suppliers and customers. The WAN of a Nebraska-based medical insurance company connects 29 different offices, uses 24 separate phone companies, and costs slightly more than $100,000 per month.

Each of these data networking examples requires both computer and telecom technology to work correctly. In all three cases, the companies use computer and telecommunications technicians to install and maintain the network. The expertise of these technicians is invaluable. They have spent years mastering leading-edge technologies that are perplexing to the average businessperson. In most organizations, however, it is a business- person who is responsible for the data network. The most efficient, cost-effective data networks rely on the expertise and savvy of technicians and businesspeople.

Numerous resources that explain the inner workings of the technological aspects of a data network are available. The purpose of this book is to provide businesses with strategic advice on managing the expenses of voice, data, and wireless telecommunications services.

In its simplest definition, data networking is “two or more computers communicating over a medium.” The communication may be considered local such as the connection of multiple computers across the inside wiring of a Chicago office building. Or the communication may be across a wide area such as a computer in Denver connecting to the Chicago office across telephone company lines. In the first example, the medium is the inside wiring in the Chicago office. In the second example, the medium is the telephone company phone lines.

LAN and WAN
LANs are normally wired with company-owned inside wiring. It costs the company nothing to transmit data across this medium because it owns the wiring. In the case of a WAN, a business transmits data across a long distance, or wide area, such as from Dallas to Chicago. WANs use the phone company’s network, so the phone company bills the customer each month for this service. Because this is a cost management book, we will deal with the telecommunications offerings and billing associated with WANs, not LANs. Within this context, our definition of data networking is “two or more computers communicating over a telephone line.”