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

A great tool for network efficiency, usually implemented in corporate settings

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Network switches operate at Layer 2 (data link) of the OSI model, while network routers operate at Layer 3 (network). This distinction leads to confusion over the definition and purpose of a Layer 3 switch, also called a multilayer switch.

What Is a Layer 3 Switch?

A Layer 3 switch is a specialized hardware device used in network routing. Layer 3 switches technically have a lot in common with typical routers, and not only 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 take additional steps through a router.

Network switches


Purpose of Layer 3 Switches

Layer 3 switches were conceived as a way to improve network routing performance on large local area networks 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 typical 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 that a standard router offers.

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

  • Reduces the amount of broadcast traffic.
  • Simplified security management.
  • Improved fault isolation.

How Layer 3 Switches Work

A typical switch dynamically routes traffic between its individual physical ports according to the physical addresses—the MAC addresses—of connected devices. Layer 3 switches use this capability when managing traffic within a LAN.

They also expand on this traffic-handling process by using IP address information to make routing decisions when managing traffic between LANs. By contrast, Layer 4 switches also factor 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.

Most home networks don't use virtual LANs.

Challenges With Layer 3 Switches

Layer 3 switches cost more than ordinary switches but less than routers. Configuring and administering these switches and VLANs also requires 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. However, this theoretical model does not do well distinguishing practical differences between industry products. The naming has caused much confusion in the marketplace.

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