Setting up an Ethernet network can be frustrating if you don't understand the basics. A network is just the communication connection between two or more devices. These devices can be computers, PLC's, servo drives, HMI's, sensors, cameras…anything that supports Ethernet communication. The network is established by assigning an identity to each device. This is done by using what is called an "IP Address". Each device on a network must have an IP Address, and that address must be different from the addresses of all other devices on that network. The network will fail if two devices have the same IP Address. An IP Address consists of four numbers, or octets. Each octet can contain a value ranging from zero to 255. There are two methods of defining an IP Address: Static IP and DHCP (or Auto IP).
If you use Static IP, then you must manually set the IP Address in each device. The address is saved in each device and will not change. This is simple and straightforward for a network with only a few devices, but can be very time consuming for large networks.
With DHCP (Auto IP), a device on the network defines and sets the IP Addresses in all of the devices on that network. This is commonly used on networks using a server or router. You can configure each device to use DHCP and they will get their IP Addresses from the server or router. Microsoft Windows can also define IP Addresses in the other devices. When using DHCP, you do not get to define the IP Addresses yourself, and the IP Addresses can change. This is helpful on large networks in that the IP Addresses are managed automatically. The server, router, or Windows operating system will make sure each device has an appropriate, unique IP Address.
An IP Address will look like 192.168.0.1. This is the default static IP Address of most devices. If you have three devices on a network, then you would need to set the addresses as follows:
The Windows operating system uses 169.254.250.x as the automatically defined addresses for a network configured for DHCP.
Notice that the first three octets are the same (192.168.0.x for Static IP; 169.254.250.x for Windows DHCP). This defines a subnet. You could have IP Address numbers that are all completely different and it would not make any difference on a small network. Subnets are used on large networks to organize the network. Some devices are on one subnet and some devices are on other subnets. They can communicate only if the subnet mask allows. Usually small networks use a subnet mask of 255.255.255.0. This means that the first three octets of each device must have the same value in order for those devices to communicate. A subnet mask of 255.255.0.0 would mean that the first two octets must have the same values in each device.