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What is WAN and Why Does It Matter to Enterprises?

This article was updated on March 26, 2022

What is WAN, and why does it matter to business decision-makers? Wide area network solutions, or WANs, are connected groups of computers, devices, and other hardware that span regions — cities, states, and even countries. The largest example of a WAN is what's hosting this article: the internet. So, how does a WAN for an enterprise function, and what are enterprises doing with it?

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What Is WAN?

Think of a WAN as a connected system of local area networks (LANs). These are the familiar one-campus setups in which all offices are wired together. Keep in mind there are also metropolitan area networks (MANs) that are connected sets of buildings across a city or town. MANs can figure into a WAN system as well.

Imagine an organization has a number of LANs located in Boston, New York, and Chicago. To span the distances between these cities, the company must either engage a leased line between each location — a dedicated connection set up by a service provider — or plug into the public telecommunications network. Security, in these cases, is most often ensured through a virtual private network (VPN).

At each connection endpoint for the Boston, New York, and Chicago LANs, the business operates a router that allows the LAN to communicate with a hub that handles incoming and outgoing data on the WAN side. Packets of information flow back and forth, and a WAN solution is in place.

Why Do WANs Matter for Enterprises?

Wide area network solutions are important for business communications because they solve for high-speed connectivity while, in most cases, maintaining costs at scale.

If not for WAN solutions, the organization in the example above would have to own and install every mile of hardware between the three cities when connecting their LANs. Instead, WANs take a far less costly approach, leveraging public systems to link one part of the organization to another across large distances.

Beyond the issue of cost, WANs open a number of new options to businesses looking to make the most of their employees' time, no matter where they're located. The ability to work remotely while also having secure access to company network assets is just one way WANs benefit enterprises.

Pros and Cons of WANs

On the pro side, as explained in the three-city example above, WANs allow a business to extend network connectivity across a geographic area. WANs also offer faster internal network speeds and give IT centralized administrative control over the company's network, which they can use to improve network performance — for instance, by implementing quality of service (QoS) settings that enable high-quality video and voice communication.

However, WANs can be expensive to implement and operate. It's usually necessary to invest in a fair amount of networking and security equipment upfront when creating a WAN. And because a WAN includes so many interlocking components, bad actors might try to exploit security gaps. With this increased complexity, the business often needs additional IT staffing resources for WAN administration.

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Although they might seem similar, a WAN is different from a LAN. Traditionally, a company would create a LAN in its office by connecting computers to an internal network, often by plugging Ethernet cables into a nearby network jack that leads back to the data center within the building. A WAN doesn't exist in a single physical location. Most businesses use WANs to link multiple locations, sometimes far away from each other, to a private corporate network. A WAN can be public, too: The internet is a WAN that's available to all regardless of location.

How to Secure a WAN

It's important to talk with security teams about the WAN as early as possible to select the most secure WAN solution — for example, some SD-WANs (software-defined WANs) offer enhanced security measures — and properly prioritize security concerns when implementing the WAN. A VPN can help secure the connections between these various endpoints. A multilayered approach to WAN security is also essential since one solution cannot single-handedly secure a WAN. At a minimum, businesses should use antivirus and firewall technology to protect users and devices on the WAN.

What Is Tunneling?

WANs, VPNs, and other networking technologies use a technique known as tunneling to transmit data. All networks break up data into smaller packets for easier transmission and reassemble them later. Tunneling encrypts and encapsulates these packets before sending them across the internet, then decrypts and unpacks them at the point of arrival. This process can help hide a user's identity and location and cloak their network activity. Businesses use VPN tunneling to create efficient, secure, and private network connections for any remote staff using a public Wi-Fi connection.

Types of WAN Technologies

When it comes to new technologies in business communication, WANs are just the beginning. Applications that drive even greater usefulness from the technology now include software-defined solutions, giving rise to SD-WANs.

Some organizations already have a software-defined network (SDN) on the premises. One common example is a data center. An enterprise's IT can help its stakeholders manage multiple types of connections at once by applying the SD concept to the WAN infrastructure, linking users across the spectrum of broadband, LTE wireless, and multiprotocol label switching (MPLS) environments. Every aspect of the SD-WAN is controllable through a central interface, and a team can replace old methods — such as on-site installations and manual maintenance — with a largely virtualized, cloud-based, and less-expensive solution than the hardware-intensive scenarios of the past.

What's Next for WANs? The Evolution of Business Communication

According to Network World, SD-WANs are on the rise. Vendors are watching revenue grow at an estimated 31% annually, and the market may well reach $5.25 billion by 2023. Enterprise leadership turning to SD-WANs join a growing vanguard, one that will define the future of business communications one network at a time.

Vonage Staff

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