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12 IT Terms Small Business Owners Should Know

Posted on by Trevor Jones

Infornation-Technology-DictionaryIf you own a small business, chances are you manage your own IT, have an employee that does it on the side for you, or employ an outside contractor.  It isn’t what you got into business to do, so you’re not an expert.  In fact, chances are when a real geek starts talking to you, everything they say sounds like a foreign language.  You have vital data on your computers including customer information, your accounts, and possibly trade secrets you don’t want your competitors to get access to.  How can you effectively manage IT if you don’t even understand the common terms?

Here is a short list of IT terms commonly in use in today’s IT world that are useful for a small business owner to know, an explanation of the term, and some useful links for more information.  I’ll try to talk in English . . . here goes.

  1. Local Area Network (LAN) – For most small businesses, this means the computers and other devices inside your building.  Technically, it means a group of devices on one “side” of a network router, so for large businesses it is possible to have multiple LAN’s within a building.
  2. Wide Area Network (WAN) – Wide Area Network usually refers to a network that connects multiple buildings together. In some cases those buildings can be miles apart and connected using telecommunications services like Metro Ethernet, MPLS or a VPN.  Technically, the wide area network is what’s on the “other side” or the network router from the Local Area Network.
  3. Router – A Network Router is a device that sits between the Local Area Network and the Wide Area Network and routes traffic between the two, based upon instructions stored in an internal routing table.  In many homes and small businesses, they are used so that multiple computers can share a printer and Internet connection. These are often confused with firewalls, but while they offer more security than nothing at all, they are not true firewalls.
  4. Switch – A Network Switch is a network component that allows you to connect multiple computers and other devices together inside your LAN.  Some network routers have built-in switches, but they are often separate devices. Do not confuse a switch with its cousin the Hub, which is an old technology you should get out of your network right away.
  5. Firewall – A firewall is a device that either blocks or permits certain types of traffic from passing through it based upon a rule set, or “policy”, that your business defines.  They are most often used between your Local Area Network and the Internet to prevent unauthorized access to your network.  While most routers have limited firewalling capabilities, in most cases it’s a good idea to have a device built for the purpose.
  6. Server – A server is a special computer used to run applications that all of your employees share. At some point you may need one to run email and calendars, store shared files, share printers, or run a special application such as an accounting program. Typically they run special versions of Windows or another operating system.  When the time comes, you’ll need to decide if you should buy a server or rent space on a virtual server.
  7. Backup – A good backup is another copy of your data that is both up-to-date and stored off-site.  If your backups are less frequent than daily, or kept in the same building as your working copy you are vulnerable.  Fortunately there are many tools available today to help with this, including an automated cloud backup.
  8. Unified Threat Management – A firewall alone is not enough to protect businesses from complex threats. There is also a need to protect from viruses, detect and prevent intrusions, and reduce wasted time and money from internal abuse of your network.  Unified Threat Management refers to devices and services that protect against a broad number of attacks.
  9. VoIP or SIP – I snuck two terms in here because for your purposes they are synonyms. VoIP (Voice over Internet Protocol) is a method of transmitting voice communication over a data network, such as your LAN, or the Internet. SIP (Session Initiation Protocol) is the most common subset of VoIP.  Whether you buy a phone system or opt to rent part of a shared system like a Hosted PBX, most modern business phone system use VoIP.
  10. Cloud Computing – Cloud Computing refers to an industry trend whereby businesses can buy software (such as Hosted Exchange or and infrastructure (such as hosted file storage or servers) as services via the Internet.  Cloud Computing has the potential to significantly lower up-front capital and reduce management headaches for businesses, but you do need to be sure the rest of your network is ready for Cloud Computing.
  11. Managed Services – In a managed service, your service provider takes over the day-to-day monitoring, maintenance, and support for one or more components of your network, in return for a monthly fee. For many small businesses, these services can reduce the requirement for internal IT staff.  For others, it reduces the time IT staff spends on mundane tasks so they can work on strategic issues.
  12. Total Cost of Ownership – This one is a financial term, but it’s applied quite often to IT.  Total cost of ownership refers to all the costs involved in owning something, not just its purchase price.  For a car, this would include the purchase price or lease fee, interest, gasoline, insurance, cleaning, repairs and maintenance.  It’s important to consider Total Cost of Ownership when deciding between buying a server or software package and using Cloud Computing.


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