Creating External Content Types and External Lists Through SharePoint Designer 2010
SharePoint 2010 defines the structure of the external data to which it will connect through external content types. External content types are similar to SharePoint content types that define the structure of the data stored in SharePoint. However, external content types define the structure of the data not stored in SharePoint. In addition external content types define the data access capabilities for the external data source.
By the Way
For those who worked on Business Data Connectivity in SharePoint 2007, you can consider an external content type to be equivalent to a BDC entity. However, external content types contain much more information compared to a BDC ...
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