Typically a proxy server will look to computers on the Local Network like a single destination that provides various services such as Email, World Wide Web, File Transfer, etc. Most proxy servers use the TCP/IP protocol and provide socket services. The proxy server will appear from the Local Network side to have a unique IP address which is generally fixed and treated as a "Gateway" address. The Proxy server itself may use an entirely different address on the external side It may use a fixed or "leased" (temporary) address. The primary function of the Proxy Server is to route information between the computers on the LAN and the world beyond. In many cases, Proxy Servers also provide Security "Firewall" services that block outside computers from accessing network resources.
Proxy servers cut costs and simplify facility management by reducing equipment and wiring requirements. They may deliver lower performance than dedicated lines since traffic is carried over shared phone lines. This is especially true when 53K or less ordinary phone lines are used to connect to the external world.
Because proxy servers must be running whenever any user needs access, they are often implemented as stand alone dedicated units -- especially in larger institutions.
Small office and home networks often use a software proxy servers running on one of the network machines. Programs commonly used include Sygate and Wingate. Lantastic 7.0 includes a Proxy Server. Windows 98SE includes a software NAT router which does much the same thing.
A distinction is often drawn between proxy servers and Network Address Translation Devices. Although the function of the two is similar, they differ in that the existence of a NAT device is entirely invisible to the other devices on the network.
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