A network camera can be described as a camera and computer combined in one unit. It captures and transmits live images directly over an IP network, enabling authorized users to locally or remotely view, store, and manage video over standard IP-based network infrastructure.

A network camera has its own IP address. It is connected to the network and has a built-in web server, FTP server, FTP client, e-mail client, alarm management, programmability, and much more. A network camera does not need to be connected to a PC; it operates independently and can be placed wherever there is an IP network connection. A Web camera, on the other hand, requires connection to a PC via a USB or IEEE1394 port and a PC to operate.

In addition to video, a network camera also includes other functionalities and information being transported over the same network connection, i.e. video motion detection, audio, digital inputs and outputs (which can be used, for example, to trigger alarms or turn on lights), serial port(s) for serial data or control of pan/tilt/zoom mechanisms.

Image buffers within a network camera can also save and send images that were collected before an alarm occurred.