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As I know there is two choice for configuring a computer IP address in the network. Assigning a Static IP or obtaining a dynamic IP from a DHCP server.

But what is the Alternate Configuration in Windows (picture below). It just says this is when the computer is used on more than one network, but how does it assign IPs and when I should use this?

"Alternate Configuration" tab of TCP/IP settings on Windows

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up vote 8 down vote accepted

As @uSlackr has said, it is the configuration that Windows will use when DHCP is unavailable. What should probably be added is that, despite the MS article's suggestion, this is almost never really used or needed for home users.

The Microsoft article states:

When you are in the office, the computer uses a DHCP-allocated TCP/IP configuration. When you are at home (where you do not have access to a DHCP server), the computer automatically uses the alternative configuration.

However, it is the reverse which I expect is more likely to be true. Most home networking hardware these days includes a DHCP server, and a majority of them even allow for DHCP address reservations. So, there's rarely a time (unless you're particularly paranoid) where a home network will ever actually need to use static IP addresses.

On the other hand there are some business networks which, for some reason or another, prefer static IP addressing over DHCP. So, you'll probably end up actually using DHCP for your home network and the "Alternate Configuration" for work.

One other rare case where the "Alternate Configuration" can be handy is for direct PC-to-PC connections, or deliberately isolated, temporary networks where there is not going to be a DHCP server available either by design or just for simplicity. While you could just use APIPA, it is much easier to communicate using known, familiar IP addresses. If it is common for you to use your computer in such situations, having the "Alternate Configuration" as a fall-back definitely beats manually switching the settings on the "General" tab every time.

The only scenario I can think of which would be useful for home users is for exactly when, as @uSlackr put it, "DHCP fails". It is not uncommon, with some SOHO networking equipment, for the DHCP service to occasionally malfunction and require a reboot of the device to resume operation. Generally during these times, a static IP configuration can work around the problem until you have a good opportunity to take the network down for the reboot.

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To defend MS here, they were not "claiming" anything, just suggesting. Also, the article was from 2004 when few homes with networks that included a router to the internet... As I said in my answer, 'you can envision a number of scenarios'. They are not rules. – uSlackr Jun 3 '11 at 14:40
@uSlacker - Point made. Changed verbiage. However, even in 2004, I think it's safe to say that most home networks were using a DHCP server of some kind. 802.11g was already released by then, and whatever homes didn't have a Wi-Fi network or wired router were still probably getting DHCP handed to them by their cable/DSL modem or (god forbid) their dial-up provider. In fact, I can't think of a time in the past 15 years that I've had to have static IPs on a home network. But, I'm just a majority of one. – Iszi Jun 3 '11 at 14:52

When DHCP fails, Windows uses a self-assigned address to configure the network adapter. This is normally useless (although there could be times...). The idea of the Alternate config is to give Windows another set of setting to use in the case DHCP fails.

You can envision a number of scenarios when this might be helpful. Details from MS here

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It's not useless when a computer newbie just wants to connect a few computers to a LAN. – grawity Jun 3 '11 at 15:33
@grawity that's why I qualified my answer with 'normally'. I have never seen a network using "automatic private IP" was in use. Instead it has always been an indicator that I do not have network connectivity for some reason. So, it is normally useless, not always. I added more qualification to my answer – uSlackr Jun 3 '11 at 15:40

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