Principle of Operation
Wake-on-LAN is implemented using a special network message called a magic packet. The magic packet contains the MAC address of the destination computer. The listening computer waits for a magic packet addressed to it and then initiates system wake-up.
The magic packet is sent on the data link or layer 2 in the OSI model and broadcast to all NICs using the network broadcast address; the IP-address (layer 3 in the OSI model) is not used.
It is a common misconception that because Wake-on-LAN is built upon broadcast technology it can only be used within the current network subnet. While this is generally the case there are some exceptions.
In order for Wake-on-LAN to work, parts of the network interface need to stay on. This consumes standby power, much less than normal operating power. If Wake-on-LAN is not needed, disabling it may reduce power consumption slightly while the computer is switched off but still plugged in.
Read more about this topic: Wake-on-LAN
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