A virtual LAN, commonly known as a VLAN, is a logically segmented network mapped over physical hardware. IEEE 802.1Q is the predominant protocol. Prior to this, Cisco was one of many companies which had a proprietary protocol: in Cisco's case, a variant of IEEE 802.10 called Inter-Switch Link (ISL).
Early VLANs were often configured to reduce the size of the collision domain in a large single Ethernet segment to improve performance. When Ethernet switches made this a non-issue (because they have no collision domain), attention turned to reducing the size of the broadcast domain at the MAC layer. Another purpose of a virtual network is to restrict access to network resources without regard to physical topology of the network, although the strength of this method is debatable.
Virtual LANs operate at layer 2 of the OSI model. However, a VLAN is often configured to map directly to an IP network, or subnet, which gives the appearance it is involved in layer 3.
Switch to switch links and switch to router links are called trunks. A router serves as the backbone for traffic going across different VLANs.
Port based, and therefore real world based, say by accounting versus marketing departments.
VLANs can be static, dynamic, or port-centric and there are two methods of establishing a VLAN: frame-tagging and frame-filtering.
External links
IEEE's 802.1Q standard (http://standards.ieee.org/getieee802/download/802.1Q-1998.pdf)
Cisco's Virtual LAN Communications white paper (http://www.cisco.com/warp/public/cc/pd/wr2k/cpbn/tech/vlan_wp.htm)
Cisco's Bridging Between IEEE 802.1Q VLANs white paper (http://www.cisco.com/univercd/cc/td/doc/product/software/ios121/121newft/121t/121t3/dtbridge.htm)
Vlans are a way to split up a layer2 broadcasting domain, by allowing multiple broadcast domains that each have a number (1-4096), and that can contain individual hosts, which are then not able to talk to eachother without passing through another device first (such as a firewall).
If the packet is to be received, the VLAN tag is to be stripped of the packet, and a second TYPE field will have to be interpreted.
It is possible to insert multiple VLAN tags, although this is not supported on linux, nor is it supported on many devices.
VLANs enable a LAN to be partitioned based on functional requirements while maintaining connectivity across all devices on the network.
The VLAN bridge functionality ensures data reception and forwarding among groups of ports (1, 3, 6 and 8) (2 and 4) and (5 and 7).
In Figure 1, MAC-based VLAN B removes the restriction for a sales division device to be attached to networks connected via ports 5 and 7 and enables the device to be part of any network reachable via the 8 ports.
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