A Windows 2000/2003/XP Professional machine can be either a member of a Domain or a Workgroup. The full benefits of Windows 2000/2003/XP can only be achieved by placing all of the computers on the network into domains. N.B. In order to utilise all of the features of Windows 2x domains, computers must be running either Windows 2000/XP Professional or Windows 2000/2003 Server families.
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In a Workgroup configuration, computers are connected but there is no central control.
Although files and folders may still be shared, security policies have to be set at each individual computer.
In a workgroup, every computer stores its own security database. For example, a new user- Fred -would have to be created on every single computer. This can become troublesome in larger environments. Although the User Account Fred has been created four times, Fred’s profile might be different on each machine, e.g. Fred might see a different desktop screen on each computer.
In a domain environment all security policies are managed centrally, i.e. The Domain Controller decides what all the client machines can and cannot do, allowing for a more secure and easily managed network environment.