Packet Switching

Packet switching is a WAN technology in which users share common carrier resources. Because this allows the carrier to make more efficient use of its infrastructure, the cost to the customer is generally much better than with point-to-point lines. In a packet switching setup, networks have connections into the carrier's network, and many customers share the carrier's network. The carrier can then create virtual circuits between customers' sites by which packets of data are delivered from one to the other through the network. The section of the carrier's network that is shared is often referred to as a cloud.

Some examples of packet-switching networks include Asynchronous Transfer Mode (ATM), Frame Relay, Switched Multimegabit Data Services (SMDS), and X.25. Figure
3-4 shows an example packet-switched circuit.

The virtual connections between customer sites are often referred to as a virtual circuit.

Figure 3-4 Packet Switching Transfers Packets Across a Carrier Network