Network Segmentation Explained in Layman‘s Terms

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If you manage an enterprise network, implementing network segmentation should be high on your priority list.

Properly segmenting your network is one of the most effective strategies to improve security, meet compliance requirements, and optimize network performance.

In this comprehensive guide, I‘ll explain network segmentation in simple terms that anyone can understand.

We‘ll cover:

  • What is network segmentation and why it matters
  • Different techniques to segment your network
  • Best practices for implementation
  • Real-world examples and use cases
  • Data, statistics and expert insights on the value of segmentation

So let‘s get started!

What is Network Segmentation?

Network segmentation means dividing your entire corporate network into smaller chunks or "segments".

It‘s like building walls inside your house to separate it into different rooms with doors in between.

Each segment contains a specific set of computers, servers, devices or resources that have something in common.

For example, all workstations used by the sales team can be grouped in one segment. All databases storing customer information can be placed in a separate segment.

The main benefit of breaking your network into segments is that it controls communication between these segments.

Devices in one segment cannot directly talk to devices in another segment without going through proper security controls. This restriction of access enhances overall security.

Let‘s understand this concept better with an analogy.

Network Segmentation Analogy:

Imagine your office as a large building with multiple floors and rooms. Now, think of your overall IT infrastructure as this building.

Network segmentation is like placing security doors between each room so they are separated from each other.

The aim is to prevent any "trouble" in one room from spreading to the entire building. For instance, if a fire starts in the kitchen, closing the kitchen door prevents it from affecting other rooms.

Similarly, dividing your network into segments isolates each part. It prevents security threats targeted at one segment from impacting your entire corporate network.

This simple analogy highlights the key benefits of network segmentation:

  • It contains damage to one segment
  • Limits lateral movement of threats
  • Reduces risk surface by creating barriers

Now that you understand what network segmentation means in simple terms, let‘s go over why it matters.

Importance of Network Segmentation

There are several crucial reasons why segmenting your network is critical:

1. Limits Lateral Movement of Threats

One of the main objectives of cyber attackers is to gain access to critical assets like databases, IP, customer data etc.

Network segmentation stops threats from easily moving laterally across the network to reach these high-value targets. It quarantines the infection to one zone.

2. Reduces the Attack Surface

By breaking the network into smaller segments, you shrink the surface area that attackers can target.

Instead of the entire corporate network, they have access to only a portion of the overall resources.

According to a 2020 SANS survey, 65% of organizations that implemented segmentation reduced their cyberattack surface.

3. Protects Sensitive Data

Sensitive information like customer details, employee records, financial data can be isolated in secure network segments with strict access controls.

This prevents unauthorized exposure of confidential data. According to Entrust‘s 2022 Data Privacy Benchmark Study, 89% of US companies use network segmentation to comply with data privacy laws and regulations.

4. Achieves Compliance

Many regulations such as HIPAA, PCI-DSS, SOX, GDPR require protection of sensitive data. Network segmentation helps meet such compliance requirements.

According to a Cisco survey, 65% of companies leverage network segmentation primarily for compliance purposes.

5. Improves Security Monitoring

It‘s easier to monitor and analyze security threats and events within smaller network segments.

Unusual activities can be quickly detected and isolated before they spread using Network Behavior Anomaly Detection (NBAD) tools.

Research shows that NBAD solutions improve threat detection by over 50% in segmented networks.

6. Enables Access Control

Access between segments can be strictly controlled using firewalls, ACLs, authentication mechanisms.

Devices only get access to resources they really need. The principle of least privilege can be enforced.

7. Optimizes Network Performance

By segmenting networks efficiently based on traffic patterns, organizations can optimize network bandwidth utilization and performance. Confidential data can be prioritized over guest WiFi traffic.

According to Fortinet, optimizing segmentation policies improves network throughput by 30% and latency by over 15% on average.

As you can see, there are many compelling reasons to implement network segmentation. It offers several security and performance benefits that are hard to ignore.

How to Segment a Network

Now that you understand why network segmentation is crucial, let‘s discuss some common techniques used to divide a network in simple terms:


VLAN stands for Virtual Local Area Networks.

This is a very popular and efficient method of network segmentation used by organizations.

VLANs allow you to create separate logical networks within a single physical network.

For instance, all workstations and devices used by the marketing team can be configured as part of one VLAN. All servers and systems used by the customer support team can be grouped into another VLAN.

Though the devices are physically connected to the same overall network, the VLAN configurations ensure complete isolation between these groups. Traffic is contained within each VLAN.

Here is a VLAN diagram for reference:

VLAN diagram

VLANs are identified using tags in the Ethernet frame headers. This allows network switches to understand which VLAN a frame belongs to. Traffic is forwarded only to devices that are part of the same VLAN.

According to Statista, over 80% of companies use VLAN segmentation to isolate networks based on departments, functions and security levels.


Subnetting involves dividing a large network into smaller sub-networks known as subnets.

This is done by segmenting the entire IP address range into smaller subsets. Each subnet gets a range of IP addresses that can be assigned to devices in that segment.

Specialized routers are configured with specific routing rules to control and optimize traffic between different subnets. This ensures controlled communication between various segments.

Here is a subnetting diagram for reference:

Subnetting diagram

Subnetting creates network boundaries based on IP address ranges and routing rules. It offers a simple way to separate networks and enforce communication rules.

Access Control Lists (ACLs)

ACLs enable creating granular rules that control traffic flows between different network segments or subnets.

For example, an ACL can restrict devices in the sales segment from accessing financial application servers in the finance segment.

ACLs make selective restriction of access very contextual and flexible as per business needs. According to Fortinet, ACLs are used for network segmentation in over 75% of large enterprises.


Firewalls placed between segments provide stateful inspection of traffic based on configured security policies.

Next-gen firewalls offer advanced capabilities like:

  • Deep packet inspection
  • Application identity aware control
  • User identity aware control
  • Intrusion prevention
  • and more…

These capabilities allow firewalls to securely enforce communication between different network zones and block threats.

According to Gartner, over 60% of organizations use firewall-based network segmentation to protect public cloud workloads.

Software-Defined Networking (SDN)

SDN (Software Defined Networking) separates the network control plane from the data forwarding plane.

This allows centralized configuration and management of network segmentation policies through software.

SDN enables administrators to programmatically define micro-segments and automate provisioning of access control policies.

Gartner predicts that by 2024, 40% of enterprises will implement advanced network segmentation using SDN for dynamic policy enforcement.

Network Virtualization

Virtual networks can be created on top of physical networks using overlays and virtual switches.

These provide the same benefits of isolation and controlled access between segments like VLANs.

Network virtualization greatly simplifies managing segmentation in dynamic multi-cloud environments. According to IDC, over 50% of enterprises use network virtualization for micro-segmentation of cloud workloads.

The techniques used depends on your specific environment and use case. A combination of multiple methods is commonly implemented for optimal segmentation.

Best Practices for Implementation

Here are some key best practices to ensure you implement network segmentation effectively:

Define a Clear Segmentation Policy

Outline a clear policy specifying your segmentation requirements, protected assets, privileged users and regulated data. Get approval from leadership.

Identify and Classify Critical Assets

Identify the important assets like databases, servers and data that need isolation. Classify them based on sensitivity to determine appropriate segments.

Segregate Based on Function and Sensitivity

Divide networks based on department (engineering, sales etc.), environment (development, production etc.) and sensitivity (confidential, public).

Restrict Lateral Communication

Use VLANs and ACLs to restrict direct lateral communication between segments. Deny by default.

Inspect Inter-Segment Traffic

Use firewalls and proxies to inspect and filter traffic between segments based on source, destination and content. Prevent threats.

Practice Least Privilege Access

Only allow users access to resources required for their role through contextual controls like RBAC, ABAC. Limit privileges.

Continuously Monitor Traffic

Monitor inter-segment traffic flows to detect anomalous patterns such as sudden spikes that could indicate an attack.

Aggregate and Filter Traffic

Use tools like packet brokers to selectively filter and aggregate internal traffic, preventing unnecessary segment exposure.

Maintain Updated Segmentation Maps

Document detailed maps showing segments, enforced restrictions, allowed protocols/ports. Keep them updated.

Review Regularly

Review segmentation policies every quarter to account for organizational and threat landscape changes. Optimize as needed.

Using these best practices will ensure you implement network segmentation in a secure, controlled manner optimized for your specific environment.

Real-World Usage Scenarios

Now let‘s discuss some real-world examples of how organizations use network segmentation to enhance security:

Isolating Public Facing Systems

Organizations place publicly accessible servers like web servers, e-commerce portals and VPN gateways in a separate DMZ segment.

This protects internal applications from external threats. Public breaches are contained in the DMZ environment.

According to Vormetric, over 85% of companies use DMZs to isolate public-facing systems.

Securing Payment Systems

Retailers implement PCI-DSS requirements by isolating payment systems like POS terminals in highly secure network segments.

This minimizes the PCI compliance boundary while ensuring cardholder data security.

Segmenting payment systems reduces the risk of PCI non-compliance by over 60% according to Verizon‘s retail breach investigations report.

Industrial Control Systems

In utilities and energy companies, OT systems are segmented from enterprise IT networks and external connections using demilitarized zones and firewalls.

This prevents unauthorized access and malware spread between OT and IT environments.

An ICS-CERT survey found that 28% of industrial security incidents involved inadequate network segmentation.

Guest Wi-Fi Access

Organizations use access controls and virtual networks to isolate guest Wi-Fi traffic from internal resources.

This provides convenient internet access to guests without compromising enterprise security.

Research shows that network segmentation reduces the risk of guest Wi-Fi breaches by over 70% in retail environments.

Securing Remote Facilities

Companies use site-to-site VPNs and VLANs to connect remote locations like branch offices to the corporate network while isolating each site into its own segment.

A Palo Alto Networks survey found that 82% of organizations say network segmentation is vital for securing remote locations.

Cloud Segmentation

In the cloud, network security groups, route tables and ACLs help create isolated network segments for each application tier like web, app, database.

IDC reports that over 90% of organizations use native cloud security controls for network segmentation of cloud workloads.

I hope these real-world examples give you a good understanding of how network segmentation is applied across various industry verticals and use cases.

The Bottom Line

Let me summarize the key takeaways from this comprehensive guide:

  • Network segmentation means dividing your network into isolated secure zones to restrict access.

  • It‘s crucial for improving security, meeting compliance, and optimizing network performance.

  • VLANs, subnets, ACLs, firewalls are common segmentation methods.

  • Align segmentation with security policies. Isolate sensitive assets.

  • Monitor anomalous inter-segment traffic flows.

  • Regularly review and update segmentation to meet changing needs.

I highly recommend implementing thoughtful network segmentation if you haven‘t already. It is one of the most impactful strategies to protect your organization from ever-evolving cyberattacks and insider threats.

Hope you found this guide helpful. Please reach out if you have any questions!


Written by Alexis Kestler

A female web designer and programmer - Now is a 36-year IT professional with over 15 years of experience living in NorCal. I enjoy keeping my feet wet in the world of technology through reading, working, and researching topics that pique my interest.