Stands for "Asynchronous Transfer Mode." Most people know of ATMs as automated teller machines -- those friendly boxes that allow you to withdraw cash from your bank or credit account while charging you a ridiculous surcharge for the service. In the computer world, however, ATM has a different meaning. Asynchronous Transfer Mode is a networking technology that transfers data in packets or cells of a fixed size.
ATM uses 53-byte cells (5 bytes for the address header and 48 bytes for the data). These extremely small cells can be processed through an ATM switch (not an automated teller machine) fast enough to maintain data transfer speeds of over 600 mbps. The technology was designed for the high-speed transmission of all forms of media from basic graphics to full-motion video. Because the cells are so small, ATM equipment can transmit large amounts of data over a single connection while ensuring that no single transmission takes up all the bandwidth. It also allows Internet Service Providers (ISPs) to assign limited bandwidth to each customer. While this may seem like a downside for the customer, it actually improves the efficiency of the ISP's Internet connection, causing the overall speed of the connection to be faster for everybody.