All well built modern computer networks, whether in the small home office or gigantic corporation, have at their hearts two essential components: a router to direct network traffic, and a firewall to restrict unwanted contact with the outside world.
A router does what the name implies: it routes chunks of information called “packets” back and forth from computer to computer, and also interfaces with the Internet. Over the years, many networks have been built using pieces of equipment called “hubs” and “switches.” A router, however, is a more “intelligent” piece of equipment than a hub or switch, as it knows exactly what information should be exchanged between specific computers. Routers also provide a much-needed extra layer of security, standing between your internal network and the Internet. As such, computers on the “outside” only see a router, and not the computers behind the router. Because of this feature alone, use a router to connect your network to the Internet, rather than a hub or switch.
Your network also needs what’s called a “firewall.” Each individual computer should have a software firewall installed, as well. The term “firewall” has its roots in automotive history, as it seems that, at least in the old days, car engines were prone to catching on fire. To protect the passengers, automotive engineers built a metal wall between them and the engine compartment. In a similar fashion, a computer network’s firewall shields the network from unwanted outside contact. To protect your overall network, get what’s called a “hardware” firewall, which is a stand-alone box that goes between your router and the Internet, as opposed to a “software” firewall, which is what would be installed on individual computers.
Network routers and firewalls are often combined into a single box of hardware, simplifying their installation, an approach I prefer. The “size” of the router depends on the number of computers on your network. If you have four computers, then get a router with four network ports, eight computers need a router with eight ports, and so forth, although this is not a hard and fast rule. “Undersized” routers can be expanded using network switches, but this tends to limit the flexibility of your network. Decent four port routers with combined firewall functions are easy to find locally, and can usually be had for about $60. Eight port routers are a bit harder to come by, with CompUSA being one of the few local retailers I could find that had this item. They carry the excellent Netgear Prosafe eight port router/firewall combo for $130, and the less expensive (and less functional) Linksys Etherfast router or $100.
Your router/firewall should provide for easy VPN (virtual private networking) access, stateful packet inspection (also known as dynamic packet filtering), and MAC (media access control) address filtering. Keep in mind that these are minimal requirements, and that many large companies use additional, and much more extreme, mind-boggling security measures.