PXE is a protocol that allows PCs and Servers to boot from network, and is usually intended for diagnostic purposes.
The PXE protocol will download an OS image from a designated PXE server on the network and boot it up.
Such an OS is typical a PE (pre-install environment) type OS that is small and uses a RAMdisk. (using a small amount of RAM in place of a hard drive)
Once the OS is shutdown it is deleted from RAM, so it is not permanent.
PXE is often used for mass deployments and imaging. A technician will boot up a Windows PE OS from network which is then used to copy a pre-configured Windows Image to the desktop.
This way machines can be formatted and re-imaged in the field.
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