Understanding the Difference Between Layer 2 and Layer 3 Switches

Technologists, step up your technical knowledge to diversify and grow your business.


For years, the average network has been dominated by the Layer 2 switch. Now as network complexity increases and applications demand greater functions from the network, Layer 3 switches are coming out of the data center and high level enterprise settings. Layer 3 switches are being used in a greater variety of commercial applications and even advanced residential projects.

Understanding the difference between Layer 2 and Layer 3 switches with regard to function and application, will open up new opportunities for technologists who want to diversify and grow their business.

Layer 2 (MAC) vs Layer 3 (IP)

The main function of a Layer 2 is to help the traffic from devices within a LAN reach each other. A Layer 2 switch does this by keeping a table of all the MAC addresses it has learned and what physical port they can be found on. The MAC address is something that operates within Layer 2 of the OSI model (what defines how networks operate). Traffic being switched by MAC address is isolated within the LAN those devices are using. When you need traffic to cross between LANs (or VLANs) is when we need a Layer 3 device.

The most common Layer 3 device used in a network is the router. A router is able to look into the Layer 3 portion of traffic passing through it (the source and destination IP addresses) to decide how it should pass that traffic along. Since a router holds information about multiple networks (LAN WAN VLAN) it is also able to pass traffic along between these networks. This is routing. The Layer 3 switch functionally exists somewhere between being a Layer 2 switch and being a Gateway Router. It can be best described by what more it does compared to a Layer 2 switch and what less it does compared to a Gateway Router.


The Layer 3 Switch: What makes it different?

When comparing the Layer 2 switch to a Layer 3 switch the first thing to look at is what additional software functionality you are getting. A Layer 3 switch is able to do everything a Layer 2 switch can, plus a lot more. The first feature you would expect to see on a switch that makes it no longer strictly Layer 2 is Static Routing. Static Routing allows traffic to be routed between VLANs. Something normally handled by a router. Switches that add only Static Routing to their software features are considered to be somewhere between a Layer 2 and full Layer 3 switch. Sometimes called Layer 2+ or Layer 3 Lite.

The next stand out feature on a Layer 3 switch is Dynamic Routing. The ability to support Dynamic Routing Protocols is one of the true identifiers of a Layer 3 switch. Dynamic Routing Protocols are used to link large networks together and share routing tables between them. They can also allow for dynamic routing of multicast traffic on the network. Other than routing traffic, Layer 3 switches also include a large number of functions which require the ability to understand the IP address information of traffic entering the switch. This can include the ability to apply QoS classifications based on IP Subnet, or tag VLAN traffic based on IP address instead of manually configuring a port.

Another feature found in Layer 3 switches is increased power and security. These switches are usually found at the core of a network which means they require the power to handle very large traffic loads. Along with this some Layer 3 switches offer 10 Gigabit SFP+ interfaces for high bandwidth links between switches. The security on Layer 3 switches will normally be some of the most comprehensive for any switch. Features like 802.1x authentication, DoS prevention, loopback detection, and ARP inspection mean these switches can operate in areas where absolute security is a must.

Uses for the Layer 3

The possible uses for Layer 3 switches are many. While they have primarily been used in data centers and large campus network environments, more applications and networks today are able to benefit from the extreme power of a Layer 3 switch.

Providing unmatched scale is one of the first benefits to using a Layer 3 switch. These are made for large networks utilizing many more Layer 2 switches with large numbers of users all at once. Utilizing 10G uplinks between Layer 3 switches or Link Aggregation on switches without 10G uplinks gives the network the ability to handle the increasing number of high bandwidth applications available today.

Layer 3 switches also provide the ability to offload work from your main router. In a topology set up with one router and one Layer 3 switch, the Layer 3 switch can be configured to handle all inter-VLAN routing. With this processing burden taken off of the router, more of its resources can be dedicated to handling LAN to WAN traffic and Firewall rules.

Applications: What networks need Layer 3 switches?

Many new AV applications are taking advantage of Layer 3 switches for their power and features specific to this level of switch. Static Routing, Multicast Routing, QoS, and advanced VLAN’s are just some of the requirements for different high end AV products.

For advanced audio over IP distributions the use of QoS to prioritize the audio and timing traffic is a key requirement. In some topologies, routing this traffic over Layer 3 will be needed which is where Dynamic Multicast Routing protocols like PIM (Protocol Independent Multicast) can be used. The same can apply to large video over IP or IP Camera solutions which utilize multicast. Those streams can be routed between VLANs using PIM. This can also easily max out the bandwidth available in uplinks between switches. Which is where the 10G SFP+ uplinks are a key feature.

Many applications on a network benefit from being set in their own VLAN while also allowing inter-VLAN communications for direct connections. In the past this was done entirely on the router, utilizing resources that could be used for WAN to LAN communications. With Layer 3 switches this inter-VLAN traffic can now be processed at the switch rather than the gateway router. This is where Static Routing and Dynamic Routing come in. Both of these functions provide network applications with a very powerful method of routing traffic between LANs and also a way to scale out in order to support very large and complex networks.

One more important function of the Layer 3 switch is future proofing the network from bandwidth bottlenecks. As bandwidth usage increases within the network and 1G ports are utilized to their maximum capacity, we can no longer rely on 1G uplinks to handle moving this traffic around the network. Soon wireless access points will be able to handle more than 1G of aggregate bandwidth which is more than most networks can handle. These WAPs will very likely use dual 1G Ethernet ports to aggregate their wired connections and increase total possible bandwidth capacity. In high density wireless environments with multiple WAPs in this configuration on a single switch, 10G ports are key to opening up the local network bottlenecks. This also applies to the advances in network attached storage. More advanced consumer level NAS devices are offering 10G SFP+ interfaces in order to accommodate 4K streaming (or other high bandwidth applications) to multiple points in a network at one time.

As networks move toward greater complexity, Layer 3 switches will become much more of necessity – especially for larger networks or networks used in businesses. As AV and IP continues to converge, the necessity to route traffic in more intelligent ways and the ability to stream switch-to-switch with full 10G speeds will keep even complex networks running at their peak. The increased power and abilities of the Layer 3 switch ensure future-proofed networks – and with network technology moving forward at such breakneck speeds, it’s incredibly important to plan for the future when installing new network devices.

Check out Pakedge Layer 2 switches online complete with intelligent easy setup features. Pakedge Layer 3 switches will be available just after New Year, the first week of January 2016.

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