VLAN stands for "virtual local area network" is a smaller logical segment within a larger, physical, wired network. Basically VLAN's are used to control the broadcast domain. As consider a company like ABC in which there are 15000 of PC`s and they are connected on a network and all are in same subnet. The windows operating system is working on each computer, So as the windows operating system is always broadcasting its every service. So if we consider that our all PC`s are in a same subnet so the every PC will sends its service broadcast and when it is coming towards a switch it will broadcast it we can`t use router as all PC`s are in a same subnet. Switch will divide only the collision domain and not the broadcast domain so switch will make a multiple copies of that and send to its every port and so if 1 switch has 24 or 48 ports then there are more switches in that network. In this case Switches performance will get degraded and end users will get affected due to poor network performance. In order to create a virtual LAN, the network equipment, such as routers and switches must support VLAN configuration. The hardware is typically configured using a software admin tool that allows the network administrator to customize the virtual network. The admin software can be used to assign individual ports or groups of ports on a switch to a specific VLAN. Advantages of VLAN such as ease of Administration, Confinement of broadcast domains, Reduced Broadcast traffic and Enforcement of Security policies. VLANs enable logical grouping of end-stations that are physically dispersed on a network. When users on a VLAN move to a new physical location but continue to perform the same job function, the end-stations of those users do not need to be reconfigured. Similarly, if users change their job functions, they need not physically move: changing the VLAN membership of the end-stations to that of the new team makes the users' end-stations local to the resources of the new team. VLANs reduce the need to have routers deployed on a network to contain broadcast traffic. Flooding of a packet is limited to the switch ports that belong to a VLAN. Confinement of broadcast domains on a network significantly reduces traffic. By confining the broadcast domains, end-stations on a VLAN are prevented from listening to or receiving broadcasts not intended for them. Moreover, if a router is not connected between the VLANs, the end-stations of a VLAN cannot communicate with the end-stations of the other VLANs.
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