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Network segmentation vs. VLAN explained


Safeguarding the network architecture is the need of the hour. According to a study, the average cost of a data breach is at an all-time high of $4.35 million. And this figure will only increase with governments and regulators becoming ever stricter on data breaches.

  • The go-to method IT administrators adopt to safeguard their networks is network segmentation. 
  • By segmenting a larger network into smaller chunks, it becomes much more manageable to secure the entire network. 
  • But network segmentation is a broad concept and doesn’t refer to a single procedure. 
  • In fact, there are several segmentation processes — one of them being VLAN. Instead of simplifying, this adds to the complexity.

In this article, we will explain the core difference between network segmentation and VLAN and when you should opt for a particular one over the other.

What is network segmentation?

Let’s start with the definitions of network segmentation and VLAN.

  • By definition, network segmentation is the practice of compartmentalizing a network according to firewall rules
  • In other words, it’s about dividing a computer network into subnetworks. 
  • The subnetworks, at the IP level, are known as subnets. Each of the subnets then works independently and in isolation. 

Think of how a nation is split into various states and provinces for better management at the local level. Running an entire nation at the federal level is too much work.

In addition to subnetting, there are other segmentation options like firewall segmentation and SDN (Software Defined Network) segmentation. 

But for this article’s sake, we will focus on subnets since those are the most common.

What is VLAN?

VLAN or Virtual LAN (Virtual Local Area Network) is also a type of network segmentation approach where the main physical network is divided into multiple smaller virtual networks.

The division is done logically or virtually, not requiring buying additional physical resources. The same resource is divided using computer logic.

There are several benefits to dividing the parts of the network, either using VLAN segmentation or subnet techniques. Some of them are:

Broadcast domain isolation

  • Both subnets and VLAN isolate broadcast domains. 
  • This way, broadcasting network traffic is contained in a single segment instead of being exposed to the entire network. 
  • This reduces the chance of network congestion during peak hours and unnecessary server overload, thereby maximizing efficiency.

Enhanced security

  • The isolation by subnets or VLAN enhances the IT network’s security policies
  • This is achieved through various factors that are at play. But primarily, the creation of subnetworks makes the flat network more secure. 
  • With multiple subnetworks, you can regulate the security parameters. 
  • Thus, those subnets containing critical data (like that of healthcare) can have enhanced cybersecurity measures more than others, making them harder to crack. 
  • So, from a security perspective, both subnets and VLAN are a must.

Better network management

  • With digitization and IT modernization, the IT infrastructure is growing. 
  • Concurrently, it’s getting harder to manage them. 
  • Microsegmentation is one way of managing the ever-growing infrastructure. 
  • By segmenting, you can deploy teams to each segment, thereby strengthening their management and accountability. 
  • With the implementation of SDN, you can even configure and automate the management of some of the subnetworks.

Flexibility in scalability

  • Many network administrators face network performance and scalability issues expanding resources. 
  • The issues are a mix of technical and economical. Network segmentation offers a solution to such issues. 
  • By segmenting the entire data center network, you can choose which segments to expand and control the resources granted to each segment. 
  • This also makes scalability more economical. While both offer scalability opportunities, VLAN offers superior functionality than subnets.

Reduced scope of compliance

  • Compliance is another area that IT execs need to work on. And network segmentation, either via subnets or VLAN, can help in this regard. 
  • By having subnets, you don’t have to audit your entire segmented network as required by regulators. 
  • Just audit the necessary subnets and submit the reports to the regulators for approval. 
  • This takes far less time and costs significantly less than auditing the entire network.

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Differences between network segmentation and VLAN

By definition, network segmentation (subnetting) and VLAN sound pretty similar. After all, there’s a division of the main network into subnetworks or smaller networks. 

But besides the core similarities mentioned above, there are a few critical differences. Let’s dive into the differences between the two.

  • The primary difference between the two subnets are layer 3 divisions, while VLANs are layer 2 divisions. As you may recall, networks are layer 1 (device), layer 2 (data link), layer 3 (IP, routers), and so on, up to layer 7 (application). TCP/IP is the newer framework with four layers only.
  • So, when you divide a network at a data link, you need to adopt VLAN. With VLAN, several networks exist on the same physical network but may not be connected to the same fiber switch.
  • In subnets, the division occurs at IP level. Thus, the independent subnets are assigned their IP addresses and communicate with others over layer 3.

Besides this significant difference, there are other dissimilarities you should know. Here’s a table to help you understand:





Divides the network within the same physical network using logic.

Divides the IP network into multiple IP networks


VLANs communicate with other devices within the same LAN

The communication between the subnets is carried out over layer 3


It is configured at the switch side

It is configured at IP level


VLAN divisions are software-based terminology since they’re divided logically.

Subnets can be both hardware- of software-based


VLAN provides better network access and tend to be more stable

Subnets offer limited control


When to adopt a subnet?

There are use cases when subnets are more suited, while there are cases when you’re better off with Virtual LANs.

  • As per the definition, you need to adopt a subnet when dividing different networks at IP level.
  • So, if you want to create multiple IP addresses for each partition, implement subnets. 
  • The subnets are essentially networks within a network with their own IP addresses. 
  • Thus, they divide the broadcast domain and improve speed and efficiency.
  • Subnets are also the go-to segmentation method when you need to make the sub-networks available over layer 3 to the outside world. 
  • With appropriate access control lists, anyone with an internet connection would be able to access the subnets
  • But subnetting is also used to prevent access to a particular subnet. For example, you may want to limit access to the company’s software codebase to anyone outside the development department. 
  • So, only network devices with approved IP addresses used by the developer network are approved to access the codebase.
  • But there are two downsides to subnets you should know. The first one is increased time complexity. When dealing with a single network, three steps are in place to reach the Process (Source Host, Destination Network, and Process). 
  • In subnets, there’s an additional step involved (Source Host, Destination Network, Subnet, Process). This extra step increases time complexity, requiring more time for data transfer and connectivity. It also affects stability.
  • Subnetting also increases the number of IP addresses required since each subnet requires its own IP address. This can become hard to manage over time.

When to adopt VLAN?

Virtual LANs are internal networks within the same physical network. They interact with one another, not with other devices on the same network or outside the world. 

Think of VLAN as a private wireless network at home. Your neighbors don’t have access to it, but everyone in your home has. If that sounds like your desired result, you should adopt VLAN.

There are three types of VLANs (basic, extended, and tagged). 

  • In basic VLAN, you assign IDs to each switch port or PCI. Once assigned, you can’t change them. 
  • Extended VLAN has more functionalities like priority-based routing. 
  • Lastly, tagged VLAN enables you to create multiple VLANs with IEEE 802.1Q.

The main advantages of different VLANs over subnet are speed and stability. Since endpoints do not have to resolve IP addresses every time, they tend to be faster.

But there’s a significant disadvantage to VLANs:

  • It’s easier to breach multiple partitions if there’s a malicious injection. 
  • Without proper network security controls, it is easier to exploit vulnerabilities using malware and ransomware, putting your entire network at risk. Having ACLs (access control lists) can help in such situations.
  • Furthermore, there are issues arising out of physical store requirements. Connecting two segments in VLAN requires you to use routers and IoT. Routers are physical devices that take up space. The more segments you create, the more routers you need to use. Over time, management can become an issue.

The bottom line

Both subnets and VLANs are network segmentation approaches that improve security and workload management. It’s not a given that you can’t have both. Some companies benefit from the implementation of VLAN and subnets simultaneously. But there are specific times when IT service providers prefer one over the other. Consider your requirements to select the approach that’s right for you.

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