Synergy is a software download that shares one keyboard, one mouse and one clipboard between multiple computers. It runs over an existing LAN connection (local area network), and lets you seamlessly move your mouse from one computer to another (like they are the same system). It works by sharing a physically connected mouse and keyboard of a powered on computer, emulating the movements and key presses on other computers over the local network. With Synergy you can also copy and paste between computers, something not possible with a KVM.
A KVM (keyboard/video/mouse) switch—also known as a "switcher"—is a physical hardware product that lets you redirect keyboard and mouse input between computers, as well as being able to switch video. There are 3 types of KVM switch; low-end, starting at the cheaper $16.00 USD price point, mid-range (from around $300.00 to $1,000.00 USD), and high end switches which can come in at an eye watering $10,000 USD (for enterprise buyers). The low-end switchers are only capable of basic A/B switching with no smooth mouse transition, but some mid-range switchers like the Freedom II can perform similar functions to Synergy. High-end models tends to be reserved for managing server farms, and often include remote video over IP features.
Why you would use Synergy over a KVM switch depends on your scenario...
Scenario: Banking Systems
A bank merger of two Baltic giants recently caused the need for two systems to be used in tandem by some 500 employees. Here's the catch: each banking system needs to run on it's own separate hardware, meaning that the employee now has to juggle two computers at their desk.
The choice between rolling out KVM switches vs Synergy is a little harder to make in this scenario. Both systems need to remain separate, so on one hand the KVM switch appears to be a hard barrier, but with the correct sysadmin and networking knowledge, the bank can safely restrict LAN traffic between the computers, restricting inter-computer communication to only what Synergy requires (port 24800 with TLS encryption), meaning only mouse and keyboard movements are shared. The clipboard sharing feature (copy and paste) of Synergy can be disabled for enterprise users, and with deployment integration assistance, rolling out a software solution can be less time consuming and far less costly (compared to the hardware solution). The software solution is much easier for end-users (no buttons to press) and provides a completely seamless experience (no accidental typing on the wrong computer).
Scenario: Software Development
The most popular use for Synergy is in software development (though there are other uses, such as 3D modelling, stock trading, and so on).
This software developer setup (at Facebook) is running Synergy with macOS on the left, and Windows on the right. Synergy allows this developer to develop and test software for two platforms simultaneously. A KVM switch could be used, but in this case Synergy is a better fit because it doesn't break the flow of development. Since there's no need to press a button to switch between development environments, the two computers are merged seamlessly and behave like one cohesive system.
The developer can also copy and paste lines of code from the Windows computer to the Mac, then on a whim, quickly react to a running program on the Windows computer to set a breakpoint in the debugger just before that critical line of code is hit. If a KVM was used here, the video function would go to waste, since both environments need to be visible at the same time.
Scenario: Server Management
KVM switches are incredibly useful when you are managing a series of independent computers (e.g. servers) where you'll only ever need to see one screen at any given point.
Here, the KVM switch is king; Synergy's lack of video switching support means that it is rarely considered for managing server racks at data centres (except for edge cases where each server has its own screen at all times). By the nature of the KVM switch, it is not tied to any particular computer, and doesn't require the OS to be active in order to work. This kind of usage is generally reserved for the heavyweight KVM providers who support network-based video and remote access over IP, as well as having up to 32 ports (meaning that 32 servers can be connected to a single switch).
Types of KVM Switch
IOGEAR 4-Port DVI KVMP Switch
Freedom II KM Switch with Glide & Switch Mouse Switching - 4-Port
Avocent Mergepoint Unity Mpu8032dac Digital Kvm Switch