# Network Segmentation: Benefits, Types & Best Practices > URL: https://www.atlantic.net/cloud-platform/network-segmentation/ | Published: 2026-09-25 | Updated: 2026-09-15 | Author: Hitesh Jethva Network segmentation is the practice of separating a computer network into isolated segments rather than viewing it as a single entity. Organizations can control traffic between segments to improve operations, strengthen security, and limit the impact of a breach. Businesses often use dedicated network segments to prevent unauthorized users from accessing sensitive data. ## How Does Network Segmentation Work? Organizations should begin a methodical network segmentation strategy by classifying systems, devices, and network traffic by function, trust level, and sensitivity. The first major choice facing decision-makers is the foundational type of segmentation they will implement to separate assets from the general IT environment. ### Physical Segmentation This type of network segmentation uses separate physical hardware for each segment. It provides the most reliable security by completely isolating each segment. Physical segmentation is an expensive option and offers little flexibility to accommodate evolving business requirements. ### Logical Segmentation A logical segmentation strategy uses shared physical infrastructure that is configured to create distinct segments. Software-defined networking costs less than physical segmentation and provides the flexibility to address changing business objectives. Most smaller, modern companies use logical segmentation to support their environments. ### Core Pillars Of Network Segmentation - **Virtual Local Area Networks (VLANs):** Switches and ports are grouped into separate virtual networks. VLANs do not permit direct access between networks. All traffic must pass through a router or firewall to enforce segmentation policies. - **Firewalls and access control lists (ACLs):** Hardware or software firewalls are located at segment boundaries. Firewall rules determine if traffic can enter a network segment based on criteria such as IP address or application. ACLs perform a similar role at the switch or router level. - **Subnetting:** This practice divides an IP address range into smaller subnetworks, each with its own broadcast domain. Routers control traffic flow between subnets. - **Software-Defined Networking (SDN):** SDN dynamically defines and manages network segments using centralized software controllers, offering greater flexibility than manually configuring hardware. - **Microsegmentation:** This approach isolates traffic into segments based on individual workloads or applications. Cloud service providers (CSPs) typically implement granular microsegmentation control to segregate customers in cloud environments and data centers for operational and security purposes. ### Segmentation Policy Enforcement Points Segmentation policies determine if traffic can cross between segments. The policies must be enforced to achieve the goals of network segmentation. Typical enforcement points include: - Physical and virtual firewalls at segment boundaries; - Next-gen firewalls (NGFWs) inspect traffic at deeper levels for intrusion prevention; - Routers can apply ACLs and direct traffic between segments; - Zero trust architecture requires authentication and authorization for all connection attempts, including between segments. ### Additional Requirements For Effective Network Segmentation Companies must implement additional, ongoing processes in support of their segmented networks. - Traffic between segments requires continuous monitoring to identify network chokepoints or anomalies. - Complete logging is required at segment boundaries to support audits and incident investigations. - Regular policy reviews are necessary to verify access control policies and make modifications to align with evolving business requirements. ## What Are The Benefits Of Network Segmentation? Organizations can achieve benefits with network segmentation. These benefits fall into the following categories. ### Security Benefits Network segmentation improves security in multiple ways. - A segmented network contains breaches and reduces the blast radius of an attack or incursion by limiting lateral movement. Threat actors who have gained access to a particular segment cannot exploit systems in other segments, reducing the damage caused by a security breach. - Segmentation reduces the attack surface by isolating sensitive data and critical systems from less-trusted areas of the network. Attackers who gain access to one segment must work hard to breach other segments, giving teams more time and opportunities to detect and eliminate them from the infrastructure. - Some infrastructure elements, such as legacy industrial control systems that can no longer be patched, can be isolated in a network segment with its own security policies. Isolating these legacy systems strengthens the company’s security posture and reduces the risk of exploitation. ### Network Performance Benefits Segmentation boosts network performance in several ways. - Companies can reduce network congestion by routing traffic to specific segments for efficient processing. - Organizations improve reliability with segmentation because a faulty network device will not affect the larger network infrastructure. The issue will be contained to a single segment. ### Compliance Benefits Network segmentation simplifies an organization’s compliance efforts. - Sensitive data is isolated and can be protected with stringent security policies. - The audit scope is reduced to designated segments containing regulated data. ### Operational Benefits IT operations benefit from segmented networks. - Monitoring and troubleshooting are streamlined by focusing on specific segments rather than the entire network. - Teams can enforce strict access controls to ensure only authorized users can reach segmented devices and data. ### Business Continuity Benefits Network segmentation supports business continuity in several ways. - By limiting the effects of ransomware or other attacks to specific network segments, critical operations are protected. - Companies can limit vendor access to certain segments rather than the whole network. ## How Implementing Network Segmentation Supports Compliance One of the primary objectives of regulatory compliance standards is to protect sensitive data. Segmentation lets companies isolate customer data from the broader IT environment, so enhanced security measures and access policies can protect it. Let’s look at how segmentation supports two common compliance use cases. ### PCI DSS Compliance Companies that handle credit card payments must comply with the [Payment Card Industry Data Security Standard (PCI DSS)](https://www.pcisecuritystandards.org/standards/). A foundational element of PCI DSS compliance is establishing a secure cardholder data environment (CDE) to protect payment card and sensitive authentication data. Businesses that do not segment their network must protect the entire infrastructure and subject it to regulatory audits. Segmentation narrows the CDE scope, resulting in smaller, less expensive audits. Security teams and network administrators can better protect a smaller, more tightly controlled CDE against data breaches. Companies can strengthen their audit and compliance posture by segmenting customer data. ### HIPAA Compliance The [HIPAA Security Rule](https://www.hhs.gov/hipaa/for-professionals/security/hipaa-security-rule-nprm/factsheet/index.html) requires network segmentation to protect patient data and prevent unauthorized access. Teams can support HIPAA’s access policies by isolating electronic protected health information (ePHI) in a designated network segment. Strict access controls required for HIPAA compliance can be limited to the regulated segment rather than the general IT environment. Segmentation also helps businesses meet the availability requirements for systems that store and process ePHI. Companies must have disaster recovery plans in place to address outages of regulated systems. Network segmentation reduces the scope of disaster recovery and enables faster restoration of system availability. ## Additional Network Segmentation Use Cases Companies may implement network segmentation to address business concerns beyond regulatory compliance. Additional reasons for network segmentation include: - Ransomware containment to limit the effects of an attack; - IoT isolation to protect against unpatched or unauthorized devices; - Segregating development and test environments; - Departmental segmentation to reduce internal threats; - Segmenting multiple cloud environments to streamline management; - Isolating backup environments for more effective ransomware recovery. ## Best Practices For Implementing Network Segmentation Organizations implementing network segmentation should consider the following best practices. - Identify critical assets by inventorying and classifying all data and network resources by sensitivity and function to determine which assets segmentation should protect. - Design segments that address the various classifications, beginning by isolating the highest-risk systems and data resources. Consider microsegmentation for the most critical workloads. - Implement default rules to restrict lateral movement between segments. A zero-trust network architecture, supported by the principle of least privilege, will result in the most secure environment. - Enable logging and monitoring at segment boundaries, with alerts to detect unauthorized incursions. - Perform penetration testing to verify the security policies and controls that are protecting network segments. Teams should revalidate the segmented environment by retesting on a defined schedule. - Document segmentation policies and implement a strong change management process to track environment modifications. ## Final Thoughts Network segmentation offers organizations multiple security, performance, operational, and compliance benefits compared with a flat network. Security teams can implement targeted access policies that protect business-critical assets and sensitive information. The many benefits of segmentation and the variety of ways to implement it make it an easy choice for most businesses. Companies can segment their sensitive data in a compliant cloud environment. Reliable providers typically offer both managed and unmanaged cloud resources that meet compliance standards. Atlantic.net provides cloud solutions that comply with [PCI DSS](https://www.atlantic.net/pci-compliant-hosting/) and [HIPAA](https://www.atlantic.net/hipaa-compliant-hosting/), reduce the attack surface, and streamline regulatory audits. ## Network Segmentation FAQs **Q: What is the purpose of microsegmentation?** A: Microsegmentation’s main purpose is to shrink the trust zone to the smallest size possible, such as a single application or system. The features of microsegmentation that provide enhanced security compared to traditional segmentation include: - Isolating individual workloads; - Supporting zero trust architecture; - Limiting breaches to a single asset; - Enforcing least-privilege granularly. **Q: Firewall vs microsegmentation?** Decision-makers should carefully consider the differences between securing assets with a firewall and through microsegmentation. A physical or software-based firewall controls traffic crossing a boundary, such as internet-initiated attempts to access the corporate network. Microsegmentation provides tighter access control to specific systems or workloads. A simple analogy is that a firewall is like the fence protecting the building, while microsegmentation is like the locks limiting access to the building’s rooms. **Q: What are the 4 types of segmentation?** A: Organizations typically implement one or more of the following four types of network segmentation. 1. Physical segmentation uses distinct hardware to create fully isolated networks. 2. Virtual local area networks (VLANs) logically separate shared hardware to create segmented domains. 3. Microsegmentation provides more granular control by segmenting a network based on individual workloads or applications. 4. Perimeter or zone-based segmentation creates a buffer zone, or DMZ, between untrusted and trusted networks. **Q: Is VLAN segmentation enough for PCI compliance?** A: VLAN segmentation is not sufficient by itself to support PCI compliance. Organizations must supplement the VLANs with firewall rules to enforce least-privilege access for VLAN connections. VLAN segmentation, combined with microsegmentation in the cardholder environment, can satisfy PCI compliance requirements. **Q: What is segmentation in networking?** A: Segmentation in networking refers to dividing a network into small, isolated sections where access control policies can be enforced more efficiently than over the entire network. Each network segment can have its own policies to limit access and prevent unauthorized users from accessing critical systems.