In telecommunications, packet switching is a method of grouping data into packets that are transmitted over a digital network. Packets are made of a header and a payload. Data in the header is used by networking hardware to direct the packet to its destination, where the payload is extracted and used by an operating system, application software, or higher layer protocols. Packet switching is the primary basis for data communications in computer networks worldwide. During the early 1960s, Polish-American engineer Paul Baran developed a concept he called "distributed adaptive message block switching", with the goal of providing a fault-tolerant, efficient routing method for telecommunication messages as part of a research program at the RAND Corporation, funded by the United States Department of Defense. His ideas contradicted then-established principles of pre-allocation of network bandwidth, exemplified by the development of telecommunications in the Bell System. The new concept found little resonance among network implementers until the independent work of British computer scientist Donald Davies at the National Physical Laboratory in 1965. Davies coined the modern term packet switching and inspired numerous packet switching networks in the decade following, including the incorporation of the concept into the design of the ARPANET in the United States and the CYCLADES network in France. The ARPANET and CYCLADES were the primary precursor networks of the modern Internet. A simple definition of packet switching is: The routing and transferring of data by means of addressed packets so that a channel is occupied during the transmission of the packet only, and upon completion of the transmission the channel is made available for the transfer of other traffic. Packet switching allows delivery of variable bit rate data streams, realized as sequences of packets, over a computer network which allocates transmission resources as needed using statistical multiplexing or dynamic bandwidth allocation techniques.

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