in terms of computer security, a firewall is a piece of software. this software monitors the network traffic between the inside and outside. the firewall is placed between the network that is to be protected (trusted) and the outside network (less trusted) aka wan or internet. a firewall has a set of rules which are applied to each packet. the rules decide if a packet can pass, or whether it is discarded.when a large network needs to be protected, the firewall software often runs on a computer that does nothing else.