Ethernet is a standard communications protocol embedded in software and hardware devices, intended for building a local area network (LAN). Ethernet was designed by Bob Metcalfe in 1973, and through the efforts of Digital, Intel and Xerox (for which Metcalfe worked), "DIX" Ethernet became the standard model for LANs worldwide.

A basic hard-wired LAN consists of the following components:

• Two or more computers to be linked together, or networked.
• A network interface card (NIC) in each computer.
• Ethernet cable to connect to each computer.
• A networking switch or networking hub to direct network traffic.
• Networking software.

A NIC is installed in each computer, and is assigned a unique address. An Ethernet cable runs from each NIC to the central switch or hub. The switch or hub will act as a relay (though they have significant differences in how they handle network traffic), receiving and directing packets of data across the LAN. Thus, Ethernet networking creates a communications system that allows the sharing of data and resources, including printers, fax machines and scanners.

Ethernet networks can also be wireless. Rather than using Ethernet cable to connect the computers, wireless NICs use radio waves for two-way communication with a wireless switch or hub. In lieu of Ethernet ports, wireless NICs, switches and hubs each feature a small antenna. Wireless networks can be more flexible to use, but also require extra care in configuring security.

Alternate technologies to Ethernet include the passé "Token Ring" protocol designed by IBM, and the far newer asynchronous transfer mode (ATM) technology. ATM allows devices to be connected over very wide distances to create WANs (wide area networks) that behave like LANs. However, for an inexpensive network located in a single building, Ethernet is a well-established standard with a solid record, boasting over three decades of providing reliable networking environments.

The formal designation for standardization of the Ethernet protocol is sometimes referred to as IEEE 802.3. The IEEE (Institute of Electrical and Electronics Engineers) proposed a working group in February 1980 - accounting for the designation [19]80 2[nd month] - to standardize network protocols. The third subcommittee worked on a flavor essentially identical to Ethernet, though there are insignificant variances. Consequently, generic use of the term "Ethernet" might refer to IEEE 802.3 or DIX Ethernet.