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I want to set up a fictional network configuration for a school in my neighborhood. They have about 50 computers altogether, 2X20 in computer rooms for students and another 10 scattered around for various professors. They should all access the internet through a dedicated Linux router machine.

What they would like is to have domain names for those three computer groups.

Lab1, Lab2 and Professors.

The computers in Lab2 and Lab1 should have static ip and should all be named by numbers. So there should be 1@Lab1, 2@Lab1.... etc.

And the Professors network should have a DHCP, with authentication.

Is it an ok solution to have all these functions on a single server? (The one which will be used as a router)
Do I have to set a local DNS for domain naming? Do the host names for Lab computers have to be set on the clients, or can they be automatically assigned?

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Sounds like a homework question. You can have all functionality on a single server; just note that there is a single point of failure for everything. 50 computers on a single network is bad practice; there will be network congestion. –  josten Sep 23 '12 at 15:32
    
They have a very low budget, and might be interested on migrating a part of their infrastructure to Linux. I was thinking of advising them to sacrifice one the strongest lab computer for a server and upgrade it with a UPS, additional NIC-s, and a better case and use the switches they already have to connect domains with the server. –  Alan Sep 23 '12 at 15:39
    
DHCP with authentication? Are you sure? Authentication is almost the exact opposite of the zero-configuration of DHCP. –  bortzmeyer Sep 23 '12 at 15:40
    
@user973917 50 computers on a single network is perfectly fine. Now whether the Internet connection will always be congestion-free... –  gravyface Sep 23 '12 at 15:42
    
@bortzmeyer I see your point, i'll skip the authentication then and go for DHCP marked to a MAC adress. I suppose its enough to expect the professors to be the only ones who will be able to access their computers (since login will be required). –  Alan Sep 23 '12 at 15:47
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Is it an ok solution to have all these functions on a single server? (The one which will be used as a router)

Yes this is ok.

Either buy an ALIX box or get a workstation with two NICs in it and install pfSense on it.

It's not Linux (it's BSD), but it'll handle all your basic network functions like DHCP, DNS, and Internet routing/NAT/firewalls.

As for DHCP authentication, if you're talking about port authentication (802.1x) I would highly recommend you avoid this for the time-being. It's not a simple undertaking and likely out of your grasp with your current knowledge.

However, if you'd like isolate the professor network from the lab network, add a third network card and assign it a different subnet and adjust the firewall rules accordingly (out of the box, the third OPT1 interface will not have firewall rules enabled and will by default deny access everywhere).

Hopefully cabling was done properly and all your network drops converge in a single room. If there's switches in the closets, they should uplink to a central closet somewhere, ideally where the ISP connection is.

Actually if there's switches in the closet, call the company that set that up and get them to do this for you; chances are (and no offense) there's somebody more experienced than you are looking after their network.

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First, thank you for the answer. Secondly, no unfortunately, there isn't anybody else to do it. The situation is that we will have a little introduction to networking and Linux to the professors of a few local schools who are in charge for their solely Microsoft networks. Through that we shall discuss abut the solution which could be applied in their environments, what would be the costs, and what knowledge is needed. The motivation for the workshop is to try to open their eyes on benefits of open source in education. –  Alan Sep 23 '12 at 16:39
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