A local area network (LAN) is a group of computers and associated devices that share a common communications line and typically share the resources of a single processor or server within a small geographic area (for example, within an office building). Usually, the server has applications and data storage that are shared in common by multiple computer users.

Every computer that is connected to the Internet is part of a network, even the one in your home. For example, you may use a modem and dial a local number to connect to an Internet Service Provider (ISP). At work, you may be part of a local area network (LAN), but you most likely still connect to the Internet using an ISP that your company has contracted with. When you connect to your ISP, you become part of their network. The ISP may then connect to a larger network and become part of their network. The Internet is simply a network of networks. However, while a local area network may serve as few as two or three users , it could also serve thousands of users.

Generally, we can classify network technologies as belonging to one of two basic groups. Local area network (LAN) technologies connect many devices that are relatively close to each other, usually in the same building. The library terminals that display book information would connect over a local area network. Wide area network (WAN) technologies connect a smaller number of devices that can be many kilometers apart. For example, if two libraries at the opposite ends of a city wanted to share their book catalog information, they would most likely make use of a wide area network technology, which could be a dedicated line leased from the local telephone company, intended solely to carry their data.

In comparison to WANs, LANs are faster and more reliable, but improvements in technology continue to blur the line of demarcation. Fiber optic cables have allowed LAN technologies to connect devices tens of kilometers apart, while at the same time greatly improving the speed and reliability of WANs.