There are two modes of operation in Windows 2003 environment. Basically a computer can work as workgroup computer or domain computer. Most home and small business environments will be Workgroup, and most enterprise businesses will run in domain mode.
Basically when you install Windows 2003 server, by default it is a workgroup computer. Workgroup environment is suitable for a limited number of computers (usually no more than 10 computers) in close proximity. However, if the number of computer is huge, it is advisable to join individual computer into domain.
In Workgroup environment, each computer store ID and password locally. There is no centralized management in this case. A user needs a user account on each computer that he/she requires access. This means, if a user needs to access to several computers in the network, each of this computer will need to have the ID and password of the user store locally. It is not an easy task for administrator if there are many computers need to be managed and configured. It may take up a lot of time to just setting up account in various PCs for a new user. Changes to user accounts, such as changing a user’s password or adding a new user account, must be made on each computer in the workgroup. As a result, passwords can become out of synchronization, if changed happened on one computer and not others.
The reason for using a domain is mainly for a single point of administration. In the case of domain environment, the user information is centrally stored in the Domain controller – a server that handles all aspects of granting users permission to login. In this case, there is a central database to be accessed by all computers in the domain. The advantage is that you have a dedicated server to log/track all users and shares via Active Directory – the database in Domain Controller. So, in this case, individual computer do not need to have this information store locally. ID and password changes only needs to be configured in the central Domain controller. This will ease the workload of the network administrator.
Anyway, Domain based networks are comparatively more complex to setup initially, but it may ultimately save in administrative time over the long-run. A domain will allow you to have a more centralized control of the systems, user accounts, policy and security.
The disadvantage to Domain environment is the cost and maintenance required in keeping this configuration running.
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