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What the sites mean in Microsoft active Directory?

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The "classical" example of using Active Directory (AD) Sites is for a physically remote location, such as a branch office. The banch office is defined in AD as an additional Site to control how Domain Controller computers replicate data and client computer authentication traffic is managed across the link between the branch office and main office.

A Site defines the physical networks within an AD infrastructure. This is in contrast to the logical boundaries created by Domains, Forests and OUs, Sites map to physical boundaries.

A Site AD corresponds to a physical location where one or more well-connected TCP/IP subnets exist. Sites contain objects called Subnets. What "well-connected" means is really up to you (since you control which Subnet objects are located within which Site object) but, generally speaking, Sites should contain Subnets that are connected at LAN speeds (10Mb/sec or faster). Sites are connected to each other with objects called Site Links. Site Links (which have a "Cost" metric used to rank their relative speed or desirability for use) represent the WAN connections that interconnect the LANs contained within the Sites.

Sites enable DC's to form replication topologies that allow for fast replication of data between DCs in the same Site and, at the same time, to form replication topologies that elect DC's as "bridgehead" replication points at the ends of slower WAN circuits connecting Sites together. This mechanism causes replication to flow between Sites (via Site Links) only once, thereby making efficient use of WAN bandwidth.

Sites enable client computers, by way of using their own IP address to locate the Site in which the Subnet they're a part of is located, to locate a DC to service logons that is "close by" on the network-- on their own LAN or a LAN close by rather than across a mucher slower WAN circuit.

Microsoft have a more detailed explanation here, but I think what I've said above is the tl;dr version.

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Sites describe the physical topology of your network (i.e. different locations, offices, etc). You use sites to control things like AD replication and login traffic, in order minimize traffic across slower, more expensive WAN links between office locations.

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