Wide Area Network (WAN) vs. Local Area Network (LAN): Key Differences and Similarities
LAN is limited to a 1 km radius, while WAN can cover hundreds of kilometers.
Local area networks (LAN) and wide area networks (WAN) are both critical components of your IT infrastructure. But there are key differences between the two, and these differences (as well as similarities) will determine how you deploy each to its optimal potential. In this article, we explain the difference between WAN vs. LAN in more detail, and we also discuss a few ways they resemble each other.
Table of Contents
- What Are Wide Area Network (WAN) and Local Area Network (LAN)?
- Wide Area Network (WAN) vs. Local Area Network (LAN): Key Differences
- Key Similarities Between WAN and LAN
What Are Wide Area Network (WAN) and Local Area Network (LAN)?
A wide area network (WAN) is defined as a telecommunications network that helps to connect devices (end-user devices and servers) that are situated several kilometers or even hundreds of kilometers away from each other.
A WAN may be public – for example, the internet is a type of WAN as it enables connectivity and data exchange between devices situated on opposite ends of the world. You may also have a private WAN in an enterprise, useful for securely sharing data and resources between geographically distributed headquarters, branch offices, retail stores, logistical hubs, and other similar locations. The key factor characterizing WAN is that it spans a geographically wide area.
A local area network (LAN) is defined as a telecommunications network that helps connect devices (end-user devices and servers) that are situated close to each other, typically inside a radius of one kilometer.
LAN is widely used in both consumer and enterprise use cases. For example, you may have a collection of connected devices like a smart refrigerator, a laptop, a voice recognition-enabled TV, and a smart home console inside a person’s house. This setup uses LAN technology to enable data exchange between these devices so that the homeowner can access and control their functionalities seamlessly. In contrast, a medium-sized office campus may have hundreds of laptops and workstations, several meeting room systems, connected printers, and attendance kiosks, servers, and other devices, also set up using LAN. as long as the devices are within a compatible geographic range, you can connect them via LAN technology. This need for proximity is the key factor characterizing LAN.
Networking technology is a foundational pillar for your enterprise as it connects the various internal cogs of your business and enables data exchange with external systems. Processes like collaboration, data analysis, payments and transactions, supply and procurement, etc., all rely on networking technology – primarily on local area networks (LAN) and wide area networks (WAN). According to Statista, the network infrastructure segment will generate over $195 billion in revenues in 2021, which will grow to over $227 billion by 2025.
See More: What Is Broad Network Access? Definition, Key Components, and Best Practices
Wide Area Network (WAN) vs. Local Area Network (LAN): Key Differences
LAN and WAN are fundamentally different from each other and must be strategically implemented. Let us explore these differences in more detail.
| Wide Area Network (WAN) | Local Area Network (LAN) | |
|---|---|---|
| Origins | Newer — popular since the 1980s-90s | Older — in use since the 1970s |
| Coverage | Hundreds of kilometers | One kilometer radius |
| Speed | Up to approximately 150 Mbps | Up to 1000 Mbps or more |
| Security | Less secure | More secure |
| Maintenance | More effort needed | Less effort needed |
| Performance | Relatively poor performance due to less bandwidth | Better performance due to more bandwidth |
| Underlying technology | MPLS, ATM, frame relay, and X.25 | Ethernet and Wi-Fi |
| Implementation costs | More expensive | Less expensive |
| Ownership | Can be publicly owned | Cannot be publicly owned |
| Fault tolerance | Lesser fault tolerance | Greater fault tolerance |
| SDN | SD-WAN is more prevalent | SD-LAN is less prevalent |
| Architectural role | WAN is not a component of LAN | LAN is a component of WAN |
Key Differences Between WAN and LAN
1. LAN technology is older in origin than WAN
The first primitive variants of LAN were developed in the 1960s and 70s to support the need for data exchange between computers in academic institutions. The Cambridge Ring in 1974 and an early ethernet by Xerox in 1973-74 are among the first commercial examples of LAN technology. In contrast, WAN is a relatively new concept popularized in the 1980s. It was only when computers became available to business users outside of academic and defense use cases that there was a need for wide-area connectivity, even if it wasn’t as secure. That’s why, even though the U.S. Airforce created the first known WAN in the 1950s, it became popular much later with the rise of the internet.
2. WAN covers 10x larger area than LAN or more
This is the primary difference between WAN and LAN. As mentioned, LAN typically covers an area of a one-kilometer radius or less, which can span a single house, an office building, an educational campus, a large retail outlet like a shopping mall, etc. WAN, on the other hand, is not limited by geographic restrictions. Depending on the medium used and the amount invested, a wide area network may stretch to cover thousands of kilometers. For instance, VoLTE technology like 4G or 5G uses a wireless medium to connect smartphones with data centers regardless of where they are situated.
3. LAN supports significantly faster data transfer than WAN
This is an important difference for enterprises, and you may need to design the network architecture in a manner that you gain from optimal LAN speeds. Depending on your telecommunication carrier and the infrastructure in place, you may enjoy speeds up to 1000 Mbps or more. Devices like Wi-Fi analyzers, amplifiers, and extenders can further increase LAN data transfer speeds. In comparison, WAN is significantly slower (approximately 150 Mbps) due to several reasons:
- There is a loss in speed as data packets travel through a long distance.
- Internet service providers (ISPs) typically cap the maximum speed in publicly owned WAN.
- WAN infrastructure is exposed to the elements, and speeds may suffer from natural disruptions.
See More: Top 10 Network Access Control Software Solutions in 2021
4. The average LAN setup is more secure than most WAN environments
Since a local area network is restricted to a relatively small space, they are more secure. LAN connects a few hundred devices at best, and they are all locally secured. In contrast, your computer is connected to millions of other devices through a public WAN network, which inevitably increases security risks. To address this challenge, enterprises can use virtual private networks (VPNs) and IP security (IPsec) protocols to protect data shared via WAN.
5. When owned by private entities, LAN is easier to maintain than WAN
As mentioned, enterprises may set up, use, and maintain their own local area networks and wide area networks. WAN isn’t limited to the public internet. However, maintaining LAN and its components is significantly easier and more cost-effective than WAN. This is because WAN relies on complex infrastructures such as leased lines and multi-protocol label switching (MPLS) that are costly to maintain, particularly when extending connectivity to remote areas. IT personnel efforts involved in LAN maintenance are a fraction of WAN maintenance efforts, as there is no need to travel.
6. LAN can provide you with better performance due to more bandwidth availability
LAN typically comes with more bandwidth availability, which means that it will continue to perform even when many devices are connected to the network. You can configure LAN to provide you with symmetric speeds – i.e., equal bandwidth allocation for both upload and download jobs. This is crucial for reliable cloud performance, as cloud utilization requires the real-time flow of two-way data traffic. In the case of wide area networks, the bandwidth available per user is much lower, and resource-intensive apps may struggle to perform when operating on a public WAN. The answer to this challenge is to set up your own WAN infrastructure for the enterprise.
See More: Top 10 Best Virtual Private Network (VPN) Software Platforms in 2021
7. LAN and WAN rely on different connectivity technologies
The underlying connectivity technologies powering LAN and WAN are also slightly different. LAN uses wired ethernet and wireless or Wi-Fi signals to set up a connection between multiple devices. Depending on the nature of the device and its distance from the central router and modem, you can use a combination of the two for your home or office LAN. WAN uses ethernet and Wi-Fi, as well as other connectivity technologies such as:
- Multi-protocol label switching (MPLS) to accelerate and regulate the flow of network traffic over long distances and complex routing pathways
- Asynchronous transfer mode (ATM) to enable data transmission of multiple traffic types like data, video, and telephony signals without having to use separate overlays
- Frame relay to enable uninterrupted data traffic to end devices
- 25, which is a protocol designed for data communication in wide area networks
8. LAN is more cost-effective to implement than WAN
Just as LAN is easier to maintain, it is also less expensive to set up than WAN. Whether end consumers or IT professionals, most of us have implemented a basic local area network at some time or the other. Modern Wi-Fi routers and telecommunication services come with easy-to-use platforms where you can connect your devices, enforce network security measures, and optimize speeds in less than an hour. In an enterprise environment with 100+ devices, you will need only basic IT expertise to set up LAN.
WAN, on the other hand, is a different matter altogether. Private WAN is extremely complex to design and implement, keeping in mind your application and device requirements. WAN implementation almost always involves an external networking technology partner.
9. Unlike LAN, WAN may be publicly owned
LAN is always a privately owned network environment. There is an end consumer or enterprise customer that purchases or leases LAN services from one or more service providers. In contrast, you may have a private WAN infrastructure and a public WAN infrastructure. The global internet environment is a good example of a public WAN, where no single entity has ownership. Its various components and sub-environments are owned and maintained by individuals, enterprises, governments, and service providers. This is not possible for a local area network.
See More: How SD-WAN Is Simplifying and Accelerating Multi-Cloud Adoption
10. LAN may offer greater fault tolerance than WAN
Fault tolerance is the network’s ability to continue to provide you with connectivity, even when one or more of its component systems suffers a fault. Typically, local area networks provide greater fault tolerance, and a brief period of downtime does not bring network operations to a standstill. WAN, however, is circuit-based and has more component systems. This makes it more prone to suffering faults, which can be difficult to trace and resolve due to its complex architecture. That’s why WAN downtime is typically considered a much more severe problem in an enterprise than LAN downtime, with higher prioritization.
11. The use of software-defined (SD) technology is more prevalent in WAN than LAN
In recent years, SD-WAN has become a hugely popular technology, owing to its efficiency and cost-effectiveness. SD-WAN allows you to implement a singular cloud-based platform with software components to govern the network instead of visiting remote sites and setting up expensive hardware. The majority of network management tasks can also be performed remotely using SD-WAN. In comparison, SD-LAN is an emerging technology offered by only a handful of carriers.
According to Market Research Future, the global SD-WAN market will reach $19.093 billion by 2026. In contrast, the cloud-managed LAN or SD-LAN market will be worth approximately $1.183 billion only by 2025.
12. LAN is a component of a larger WAN environment
This is a critical differentiating factor between WAN and LAN. Multiple local area networks together form a wide area network, making the latter a component of the former. For example, each individual consumer may have a separate local area network at their home. Multiple personal LANs may be connected via a wide area network managed by the region’s government. Thousands of LANs around the globe form the public internet, which is also a wide area network. In an enterprise context, each office location may be connected via LAN, and all LANs may communicate with the company’s headquarters and with each other through a secure private WAN.
See More: 5G vs. Fiber Optics: Which One Suits IoT Connectivity the Best?
Key Similarities Between WAN and LAN?
While wide area networks and local area networks may be different, they also resemble each other in many areas. The most important similarities between LAN and WAN include:
Similarities Between WAN and LAN
1. Both involve two or more nodes that are being connected
As a prerequisite for both WAN and LAN, you need two or more computing nodes that are being connected. This could be two end-user devices, an end-user device and a server, smart office or home appliances, or any other networked endpoint. You cannot have either a WAN or LAN environment without at least two separate nodes in place, which are at some distance from each other.
2. Both use TCP/IP protocols
While LAN and WAN have different underlying technologies, as discussed in the previous section, both rely on the transmission control protocol/internet protocol (TCP/IP) model. TCP/IP is a collection of internet connectivity standards and protocols first developed by the department of defense in the 1960s. It segments a network environment into four discrete layers: the application, transport, internet, and network access layers. Both WAN and LAN rely on TCP/IP.
3. Both LAN and WAN may be wireless or wired in nature
You may leverage both LAN and WAN to connect devices using wires or through wireless transmission. Fiber-optic, coaxial, and twisted-pair cabling are the three main types of wires used for LAN and WAN connectivity. Wireless WAN and LAN environments both rely on 3G, 4G, 5G, and Wi-Fi signals to enable network connectivity.
4. Both LAN and WAN can be used by consumers and enterprises alike
Consumers typically use publicly owned WAN infrastructure, although visitors in an enterprise or official establishment may also use private WAN connectivity. Consumers may also have privately owned local area networks in their homes and may lease LAN services from local providers. Enterprises may design local area networks for individual offices and operational locations or for mid-sized to large campuses. They may also have privately owned WAN spanning multiple cities or even connecting different countries for secure data transmissions.
5. They are both susceptible to security vulnerabilities (at varying degrees)
Technically, both local area networks and wide area networks are open to security risks at some level or the other. This is because once you connect a device to a network, a fresh threat vector is added through which malicious entities may initiate an attack. The only way to have a 100% secure device is to close off all connectivity and perform all processes entirely on-premise. Since this is impossible to achieve in a modern digital landscape, both LAN and WAN have to be secured through VPNs, network access control, software and hardware firewall, and secure network policies.
6. Both can gain from the cloud
Software-defined networking (SDN) applies cloud-based networking mechanisms to both WAN and LAN. SD-WAN and SD-LAN can help enterprises reduce their hardware footprint as well as the need for on-site IT personnel. This would result in significant cost and effort savings, and it is easier to govern both LAN and WAN environments through a centralized cloud portal.
See More: Cloud Controlled Wireless and Cloud Managed Wi-Fi: What’s the Difference?
In conclusion: The top WAN and LAN providers to consider
Enterprises need both LAN and WAN infrastructure to drive seamless connectivity, power business applications and enable processes that bring about clear business outcomes. Here are the top providers in each space that can help you strengthen your WAN and LAN environments:
Top WAN providers
- Silver Peak, a provider of WAN appliances, WAN optimization, and SD-WAN solutions
- Aryaka, a cloud-first managed SD-WAN service provider
- Meraki, Cisco’s portfolio of WAN hardware and software solutions
- Masergy, a leading cloud and MPLS-based WAN provider
Top LAN providers
- Mist, a provider of AI-powered wireless and wired LAN
- Cisco, a leading LAN hardware and security company
- Aruba, an HPE subsidiary specializing in wireless LAN solutions
- Extreme Networks, a cloud-based LAN management provider
Apart from this, you can always partner with leading telecommunication companies in your region to find WAN and LAN solutions tailored for your enterprise. As networking infrastructure becomes central to how individuals and companies operate, your connectivity environment will drive business success. That’s why it is vital to understand the difference between wide area networks and local area networks (as well as their similarities), so you can leverage the potential of each solution.
Do you agree that enterprises should invest in both LAN and WAN infrastructure? Tell us on LinkedIn, Twitter, or Facebook. We would love to hear from you!
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