Here's Why Your Network Might Need a Layer 3 Switch

Digital communication
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Traditional network switches operate at Layer 2 of the OSI model while network routers operate at Layer 3. This often leads to confusion over the definition and purpose of a Layer 3 switch (also called a multilayer switch).

A Layer 3 switch is a specialized hardware device used in network routing. Layer 3 switches technically have a lot in common with traditional routers, and not just in physical appearance.

Both can support the same routing protocols, inspect incoming packets and make dynamic routing decisions based on the source and destination addresses inside.

One of the main advantages of a Layer 3 switch over a router is in the way routing decisions are performed. Layer 3 switches are less likely to experience network latency since packets don't have to make additional steps through a router.

Purpose of Layer 3 Switches

Layer 3 switches were conceived as a technology to improve network routing performance on large local area networks (LANs) like corporate intranets.

The key difference between Layer 3 switches and routers lies in the hardware internals. The hardware inside a Layer 3 switch blends that of traditional switches and routers, replacing some of a router's software logic with integrated circuit hardware to offer better performance for local networks.

Additionally, having been designed for use on intranets, a Layer 3 switch will typically not possess the WAN ports and wide area network features a traditional router will always have.

These switches are most commonly used to support routing between virtual LANs (VLANs). Benefits of Layer 3 switches for VLANs include:

  • Reduction in the amount of broadcast traffic
  • Simplified security management
  • Improved fault isolation

How Layer 3 Switches Work

A traditional switch dynamically routes traffic between its individual physical ports according to the physical addresses (MAC addresses) of connected devices.

Layer 3 switches use this capability when managing traffic within a LAN.

They also expand on this by utilizing IP address information to make routing decisions when managing traffic between LANs. In contrast, Layer 4 switches also utilize TCP or UDP port numbers.

Using a Layer 3 Switch With VLANs

Each virtual LAN must be entered and port-mapped on the switch. Routing parameters for each VLAN interface must also be specified.

Some Layer 3 switches implement DHCP support that can be used to automatically assign IP addresses to devices within a VLAN. Alternatively, an outside DHCP server can be used, or static IP addresses configured separately.

Issues With Layer 3 Switches

Layer 3 switches cost more than traditional switches but less than traditional routers. Configuring and administering these switches and VLANs also require additional effort.

The applications of Layer 3 switches are limited to intranet environments with a sufficiently large scale of device subnets and traffic. Home networks usually have no use for these devices. Lacking WAN functionality, Layer 3 switches are not a replacement for routers.

The naming of these switches comes from concepts in the OSI model, where layer 3 is known as the Network Layer.

Unfortunately, this theoretical model doesn't do well distinguishing the practical differences between industry products. The naming has caused much confusion in the marketplace.