Dynamic Host Configuration Protocol (DHCP) Primer

DHCP is a networking protocol that provides safe, reliable, and simple TCP/IP network configuration and offers the dynamic configuration of Internet protocol addresses for computers. DHCP ensures that addresses conflicts do not occur and helps conserve the use of IP addresses through centralized management of address allocation.

Windows NT server background

Microsoft Windows NT was first released in 1993.  NT stands for New Technology.  Windows NT was Microsoft’s platform of choice for high-end systems until the release of Windows 2000.  Windows NT comes in two versions, NT Server and NT Workstation.  Windows NT Server is used as a network server, and Windows NT workstation is a stable client operating system.

Windows NT contains the Windows 95 interface, but unlike Windows 95, it is entirely 32-bit.  NT’s 32-bit architecture allows NT to reference more memory, and it allows preemptive multitasking.  Besides being a 32-bit system, Windows NT uses the NTFS file system.  NTFS is more reliable and offers more security features than FAT16 or FAT32.  NTFS allows compressed files and folders to be accessed and written to.  NTFS also allows operations to be undone or redone if errors occur.

The advanced NT kernel gives NT powerful capabilities.  The NT kernel controls things such as managing memory and I/O, handling device signals, and task scheduling.  Programs run in protected memory. This lets multiple applications run simultaneously without interfering with one another or with the operating system itself.  If one program crashes, the operating system can shut it down without interfering with any other programs running in memory.  This prevents one program from crashing the whole system because of a memory error.

Windows NT Server includes many built-in services.  There are wizards used to automate many common administrative steps.  User profiles can be configured.  NT allows remote access by using IAS (Internet Authentication Services) and RADIUS (Remote Authentication Dial-In User Service).  NT Server contains network services such as DNS and WINS for hostname translation and DCOM (Distributed Component Object Model) used for running applications from a server to many client machines.

Now that you have a fundamental knowledge of the features of Windows NT, I will explain what DHCP is and how a DHCP server can be implemented on a Windows NT Server.

One of the big issues with Organizations, Computers, and Networks is the fact that they are constantly changing.  System Administrators must be on top of their hardware to network configurations.  Otherwise, they will be spending much time retracing the who, what and where of the hardware associated with any given IP address when things go wrong with their network system.  In my opinion network problems are about the hardest to pinpoint, repair and configure, which means that anything that will simplify the complexity should be done.

DHCP configuration

When a server is set up as a Dynamic Host Configuration Protocol Server (DHCP), there is only one IP address that needs to be hardcoded, and that is the DHCP Server itself.  The rest of the hardware that requires IP addresses will receive dynamic addresses from what is called the Scope of the DHCP server.  The scope is a range of IP addresses registered to the DHCP server.  By using this type of server, network administrators are freed from the task of recording logs of every IP address in use and which users have been assigned that address.

Another essential feature of DHCP is that a network can have more users than it has TCP/IP addresses registered.  This is because each IP address is leased for a specific length of time determined by the network administrator.  Once the lease period has expired and has not been renewed the IP address is put back into the pool of available IP address.  This allows a different user the opportunity to use that same IP address or others in the address pool when they connect to the network.

It is important to note that only one instance of a specific IP address can be used at any given time and is not available until the previous user releases it or the IP address lease expires.  An additional feature of DHCP is that it is capable of supporting multiple subnets because administrators can assign additional scopes (pools) of IP addresses.

The basics of how DHCP works is that a client workstation will broadcast a discover message out to the network which is forwarded to a DHCP server on the network.  The DHCP server responds with IP addresses for the client to select from.  After the client selects an address, it responds back to the DHCP server with a request to use that IP address.  From here the DHCP server accepts the request and leases the IP address to the client.  The leased IP address is used by the client to bind itself to the network.

Now that you have the fundamentals of what a DHCP Server is and how it will make a network administrator’s job a little easier, which in turn aids in lowering the Total Cost of Ownership (TCO).  I will explain the process of installing the DHCP Service on the Microsoft Windows NT 4.0 Server.  To begin the process, the TCP/IP protocol must have been installed or needs to be installed first.  The following steps will install the DHCP Server Services:

  • Click on Start, Settings, Control Panel, then double-click on the Network Icon.
  • Now click on the Services Tab, then on the Add button.
  • This opens the Select Network Services dialog box.
  • The Network Service to be added is Microsoft DHCP Server; click on this, then on Have Disk.
  • Insert the Microsoft Windows NT 4.0 Server CD-ROM and make sure it is pointed to D:\I386\ (D: being your CD-ROM drive) then click OK.

Once the software is finished installing the DHCP Server Services, it would be a good idea to reboot the Windows NT Server to make sure all the new configurations have completed successfully.  After the server is up and running again, I am ready to define the scope of IP addresses that will be able to be leased out by the server.  As a reminder, I would like to mention that scopes are the defined available and not available ranges of IP addresses on the Windows NT Server for use by future clients.  Additionally, a DHCP server can have more than one scope defined and also be managing one or more subnet ranges of IP addresses.

Figure 1 – Windows NT DHCP Manager

To set up the DHCP Server Scope (See figure 1 above), a tool called the DHCP Manager will be used.  The DHCP Manager was installed under the Administration Tools program group when the DHCP Server Services were installed.  Once the DHCP Manager is started, you will notice that its main window is divided into two sections.  Right now the only section that has anything in it is the left section.  The left section will show a computer called “Local Machine” which is the server that the DHCP Manager is running on.  Later this side will also show scopes of defined IP addresses on this server.  The right section will be used to display options that have been configured on the server.  The following steps will walk you through the set up of a DHCP scope:

  • Start by double-clicking in the left pane on “Local Machine” (DHCP Server).
  • In the DHCP Manager window, click on the Scope menu, then on Create.
  • This should open the Create Scope dialog box.
  • On the left, fill in the Starting IP Address and Ending IP Address. These two values are included in the available range.  Also check that the default Subnet Mask Windows NT puts in is correct.  Most of the time this only becomes an issue when you are using address sub-ranges.
  • Lower down you will see the option to exclude a range of IP addresses.  If you enter a Start and Ending IP address that range will be excluded including the IP address entered for Start and End.  If you only enter a Start Address and then click the Add button only that IP address will be excluded.
  • The next step is to set up the Lease Duration for the Scope created earlier.  In this step, you have a couple of choices you can decide to lease the IP address for a specific period or choose to have the lease never expire.
  • To specify a lease for a limited duration of time, you must choose the “Limited To” option and enter the lease duration in days, hours and minutes.
  • To specify a lease that never expires you must choose the “Unlimited” option.
  • Lastly, you can complete the last two fields, which are Name and Comment.  The Name should be filled out because this will help you identify the scope in the DHCP Manager window.
  • Now you just have to click on the OK button once the scope has been defined.
  • The DHCP Manager should notify you that your scope has been modified successfully.  All you have to do now is click on the YES button to activate it.

When the DHCP Server Manager is displayed, the new scope will appear on the left-hand side of the window.  You will notice that there is a light bulb icon that is lit, yellow in color, by the new scope address on the left side of the DHCP Manager window.  This lit light bulb signifies that the scope is active.  This completes the set up of the Windows NT 4.0 Server acting as a DHCP Server for this network.

Figure 2 – TCP/IP Network Settings

The DHCP Server is ready to lease addresses to the networks’ clients.  Now the clients must be set up with the TCP/IP protocol in their network settings.  (see figure 2 above) Highlight the TCP/IP Protocol then select the Properties button.  Now choose the IP Address tab and make sure the “Obtain an IP address from a DHCP server” button is selected.  You do not need to specify a subnet mask.  Once this step is completed just restart each client PC that you have set up so that it will connect to the DHCP server and lease an IP address.


By using a DHCP Server to administer a networks IP addresses, there is a definite saving in the Total Cost of Ownership (TCO) for the network system.  The TCO reduction is related to the job functions that the DHCP Server assumes for the network administrator.  The DHCP Server now maintains the tracking of all IP addresses and who has been assigned to them.  Also, tracing down network problems are simplified a bit by the IP address tracking being current instead of most likely out of date due to time constraints and the constant changes that occur throughout a network.  A further point to mention is that you can have more users than available IP addresses.  This is possible by having the IP address leases expire when the user logs off their system.  In all, a DHCP Server is a convenient tool for any information systems department.






About The Author

Eric Vanderburg

Eric Vanderburg is an author, thought leader, and consultant. He serves as the Vice President of Cybersecurity at TCDI and Vice Chairman of the board at TechMin. He is best known for his insight on cybersecurity, privacy, data protection, and storage. Eric is a continual learner who has earned over 40 technology and security certifications. He has a strong desire to share technology insights with the community. Eric is the author of several books and he frequently writes articles for magazines, journals, and other publications.

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