NordLayer - Network Security

What is Network Segmentation?

By NordLayer
6 Dec 2021
7 min read
What is Network Segmentation?

Network segmentation is the process of dividing a network into smaller sub-sections. The purpose of doing this is to improve network security, while improved network performance can also be achieved. There are several terms, which essentially mean the same thing, including; network segregation, network partitioning, and network isolation. Boxing-off or sectioning different parts of a network into different compartments can be done in different ways — and each has a specific benefit or number of additional associated benefits that we’ll cover off throughout this piece.  

Why do businesses need network segmentation?

Imagine a large business with several branch offices. The company’s security policy restricts branch employees from accessing its financial reporting system — with the majority not needing access to it do their job function. Network segmentation can enforce the security policy by preventing all branch traffic from reaching the financial system. By reducing the overall network traffic, the financial system will work better for the financial department who use it, meaning it’s a win-win for everyone. 

How does network segmentation improve security?

With regards to cybersecurity, the key idea behind network segmentation methodology is that if a certain part of the network is compromised, segmentation ensures that attackers can’t move laterally to continue harmful activity. Segmentation essentially traps the issue within a specific area and is set up to isolate it, until it can be remedied. 

Segmentation works by controlling how traffic moves between different parts of the network. You can choose to stop all traffic in one part of the network from reaching another, or you can limit the flow by traffic type such as; source, destination, and identity. How you decide to segment your network is called a segmentation policy — this is your strategic roadmap to putting the right plan in place for your business. 

Zero Trust & network segmentation 

As a reminder, Zero Trust is a way of describing an IT security approach where implicit trust is removed from all computing infrastructure. Instead, trust levels are explicitly and continuously calculated and adapted to allow access to a business’s IT resources.

Zero Trust security is designed to address shortcomings of legacy networks by transitioning to a model based on the principle of “trust none, verify all.” Instead of granting unlimited access to corporate resources, a Zero Trust security strategy provides access on a case-by-case basis.

Network segmentation lends itself well to a Zero Trust approach as each part of the network requires access verification, tightening the security around each individual resource. Using a modern remote access security solution like NordLayer allows you to set user access permissions via network access control (NAC) functionality. 

You can also create IP allowlists, which automatically allow or deny access based on a user or device’s IP address, ensuring employees can only reach data or cloud applications on a ‘need to have’ basis. This ensures key resources arent readily available to anyone in the company and employees can be restricted in accessing data and apps they need to perform their job role. 

This approach also limits the risk of insider threats and with this in mind, network segmentation should always be done from the inside out. First, you need to determine what you are protecting including data, applications, and assets that are important to your company. This defines the protected surface and the starting point for looking at how to reduce the attack surface

Zero Trust allows you to enforce segmentation all the way up to layer 7, at the app level. Most experienced hackers can bypass controls up to layer 3 so it’s imperative that you can segment all the way up to the top of the open systems interconnection (OSI) model where possible. 

Network segmentation benefits

Improve operational performance

Overall, segmentation reduces network congestion. For example, if a hospital's medical devices can be segmented from its visitor network — it means that medical device performances are unaffected by web browsing from the visitor network. 

Limit cyberattack damage

Segmentation improves cybersecurity by limiting how far an attack can spread. For example, segmentation keeps a malware outbreak in one section of the network — ensuring it doesn’t impact systems in another.

Protect vulnerable devices

Segmentation can stop harmful traffic from reaching devices that are unable to protect themselves from attack. For example, a factory’s machinery might not be equipped with advanced security defenses — network segmentation can stop harmful internet traffic from ever reaching them.

Reduce the scope of compliance

Segmentation reduces the costs associated with regulatory compliance by limiting the number of in-scope systems. For example, segmentation separates the systems that process payments from those that don't. That way, the expensive compliance requirements, and audit processes apply only to the in-scope systems, not the entire network.

Types of network segmentation 


Firewalls inside a network can limit the attack surface and prevent threats from spreading. Since this method requires many firewall rules, it can introduce considerable complexity and costs to implement. 

Segmentation with Software-Defined Networking

SDN-based network segmentation supports greater automation and programmability. However, it focuses less on security visibility and more on network policy implementation.

Host-based segmentation

With workload telemetry, a map of environments and applications can be created to visualize what must be protected. Specific labels can be created to implement an automated segmentation policy.

Network segmentation VLAN

This involves creating segments in networks with virtual LANs or subnets using IP addresses for division. All hosts are connected virtually to each other as if they were part of the same LAN. This method improves network performance and prevents threats from spreading beyond a VLAN, but it requires realigning network architecture and managing numerous access control list rules on various network devices.


Micro-segmentation logically divides a company data center into distinct security segments up to individual workload level. The granularity level at which micro-segmentation works is up to virtual machines and individual hosts, unlike network segmentation. 

Instead, network segmentation creates sub-networks within the overall network to prevent attackers from moving inside the perimeter and attack the production workload.

Differences between segmentation & micro-segmentation 

Network segmentation is generally considered a north-south network traffic control, meaning that once inside a designated zone of the network, users are trusted. Such trust models lead to breaches, and that’s a major reason micro-segmentation evolved

Microsegmentation originated as a way to moderate lateral traffic (east-west) between servers in the same segment, but it has evolved over the years to include intra-segment traffic. 

When it comes to the network security strategy, organizations shouldn’t be choosing “either/or”. Network segmentation is best for north-south traffic and micro-segmentation adds a layer of protection for east-west traffic — server-to-server, application-to-server, web-to-server, etc. 

Using the analogy: Network segmentation is the walls and moats of the castle while micro-segmentation is the guards standing at the doors of each room for an added layer of security. 

Network segmentation use-cases

Guest wireless network

Using network segmentation, a company can offer Wi-Fi service to visitors and contractors at relatively little risk. When someone logs in with guest credentials, they enter a micro-segment that provides access to the internet and nothing else.

User group access

To guard against insider breaches, many enterprises segment individual internal departments into separate subnets consisting of the authorized group members and the resources they need to do their jobs. Access between subnets is rigorously controlled. For example, someone in HR attempting to access the finance subnet would trigger an alert and an investigation.

Public cloud security

Cloud service providers are typically responsible for security in the cloud infrastructure, but the company in question is responsible for the security of the operating systems, platforms, access control, data, intellectual property, source code, and customer-facing content that typically sit on top of the infrastructure. Segmentation is an effective method for isolating applications in public and hybrid cloud environments.

PCI DSS compliance

Network administrators can use segmentation to isolate all credit card information into a security zone – essentially a protect surface – and create rules to allow only the absolute minimum, legitimate traffic in the zone while automatically denying everything else. These isolated zones are frequently virtualized SDNs in which PCI DSS compliance and segmentation can be achieved via virtual firewalls.

Importance of implementing network segmentation 

Better defenses

While an organization’s firewalls and cybersecurity prevention processes are critical practices, they often fail at some point to block or detect threats entering your company network. Network segmentation benefits organizations by adding several boundaries between the essential business assets and the external world, offering opportunities for detecting and quickly responding to arising threats.


A business with a more segmented network has greater visibility into its internal traffic. Network segmentation best practices ensure that the organization can better understand the network traffic that passes through their systems.

Enhanced network access control

The firewalls used to implement network segmentation best practices can also enforce key access control measures. It enables companies to limit network access to crucial assets based on specific user permissions.

Reduce lateral movement

Once a cyber-attacker compromises user endpoints they move into the network and try to access critical systems to achieve their malicious goals. Fortunately, network segmentation reduces the risk of access to other parts of your network and enhances the likelihood of threat detection as the attackers try to cross segmented boundaries.

Heighten network performance

When implemented correctly, network segmentation helps break a company’s intranet into clearly defined segments. It helps to minimize network congestion across the organization significantly while improving performance.

Internal threat management

A perimeter-based defense can excel at detecting any external threat, but it can be blind to a malicious insider or a compromised employee. Network segmentation restricts access and provides more visibility to ensure you can also manage any arising internal threats.

Simplifying security compliance

Most regulatory compliance tests like penetration testing involve all machines within the organization that can access protected data. Segmenting the network limits the scope of access by confining protected and sensitive data to specific network segments — simplifying your compliance responsibilities.

  • Protect critical business systems: An essential part of information security is ensuring your highly available systems are safe from cyberthreats. That means placing them on highly secure and isolated network segments, thus minimizing their threat exposure.

  • Isolate untrusted networks: Guest networks, BYOD policies, and the rising use of IoT in business all introduce multiple untrusted and insecure devices into company networks. Separating these devices on their networks is one of the core network segmentation best practices as it limits their threat to the organization’s network.

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