My Uncle has been running a school and wants a network for about 50 computers and wants to enable internet only for 2 PC's and wants file sharing and password protected printer sharing for all of them... He dosen't want to buy a server either.. He wants me to install the server edition on a normal PC and give each student and staff a password protected folder(there are about 1500).

How do I accomplish this?? Any help would be appreciated..

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There are a few things that stick out with regard to your description. The first, most important is sharing of resources. When dealing with resources, you have to manage user accounts and passwords. Since you have more than just a handfull of PCs, the implementation of a domain model will result in the least cost and administrative effort. This is because your user accounts will be centrally managed. Without a domain, you would have to create accounts on each computer and manage them seperately. For example, if you have 50 users, all 50 users would be created on each computer and the user's password would need to be the same on every computer so that sharing of resources can be possible. This design would be considered a workgroup. The general suggestion is that a workgroup should be no larger than 10 computers, otherwise the administrative effort is just too costly.

With regard to the internet access for two computers, the only way to enforce that is going to be at the edge of the network by either either creating a rule/policy on the internet router, or to have a proxy server on the network. In the case of a small network with 50 computers, I would suggest that you just find a consumer based router that can provide this functionalilty. There are "soft" methods to prevent users from accessing the internet on the workstation, but all of those methods can be bypassed, especially by bright students... Without perimeter firewall filtering, all someone would have to do is boot off of a linux CD, and lauch a browser. None of the windows or software applications you would install on the workstation would prevent internet access in that scenario.

With regard to a run a server operating system, there is no requirement that you must run it on a server hardware. Actually server hardware and PC hardware is really the same computer architecture. The difference is in server hardware, you usually have better components and fault tolerance built in (redudant fans, RAID arrays, etc...).

For a network of this size, you may want to consider running a Small Business Edition of Windows. That edition supports up to 75 users on a domain. It is the most cost effective edition when compared to other Windows Server Operating Systems.

Otherwise, you could run Linux or other flavors, but I am not the correct person to advise on those platforms.

A reasonably full-featured router for the network should allow you to block internet access to all but the authorized systems. You can do this with a dedicated router (cheapest, and easiest method), or a computer that is acting as a router.

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