Differentiating Layer 2 and Layer 3 Switching

Utilising Layer 2 and Layer 3 for Optimal Delivery of High-Quality Data Services

In accordance with the Open Systems Interconnection (OSI) networking model, Layer 2 is designated as the data link layer. This layer commonly employs the Ethernet protocol, with devices being distinguished by a unique Media Access Control (MAC) address. Typically, this MAC address is hardcoded into a specific device and remains static over time.

Conversely, Layer 3 corresponds to the network layer and utilises the Internet Protocol (IP) as its protocol. In IP networks, devices are identified by IP addresses, which can be dynamically assigned and may change periodically. Historically, routers have been closely associated with Layer 3, facilitating the connection of devices across different IP networks.

7 layers of the OSI Model
7ApplicationEnd User layer-HTTP, FTP, SSH, DNSProcess
6PresentationSyntax layer-SSL, SSH, MPEG, IMAP
5SessionSynch & send to port-APIs, Sockets
4TransportE2E connection-TCP, UDPHost-to-Host
3NetworkPackets-IP, IPSec, ICMP, L3 SwitchInternet
2Data LinkFrames-Ethernet, PPP, L2 Switch, BridgeNetwork
1PhysicalPhysical structure-Coax, Fiber, Wireless, Hubs


Switches serve as vital traffic directors within a network, particularly within a local area network (LAN). As networks expand in size and intricacy, the introduction of virtual LANs (VLANs) becomes necessary to segment the larger physical network into multiple logical networks. In order for two devices to effectively communicate across a typical business or home network, they must possess both an IP address, associated with Layer 3 (the IP layer), and a MAC address, linked to Layer 2 (the Ethernet layer).

While simple networks facilitate device connections through Layer 2, the introduction of more VLANs in complex networks necessitates Layer 3 switching. This enables devices connected to different VLANs to communicate without relying on a dedicated router. Common routing protocols such as RIP and OSPF (Open Shortest Path First) are often used to allocate Ethernet ports to different VLANs.

Layer 3 hardware logic can sometimes replace the software logic deployed in routers, although it does not offer complete routing capabilities.


Major Switching Applications for L2 and L3

Major Layer 2 switching applications revolve around its high efficiency, characterized by a minimal modification to data packets and frame encapsulation changes only when traversing different media types, such as Ethernet to fibre. Layer 2 switching finds extensive use in workgroup connectivity and network segmentation, facilitating the breakdown of collision domains. This segmentation allows for a flatter network design, featuring more network segments compared to traditional networks interconnected by repeater hubs and routers. Moreover, Layer 2 switching has spurred the development of new network infrastructure components like server farms. By leveraging virtual LANs to create broadcast domains and network proximity in a switched internetwork, servers can now be centralized, eliminating the need for physical distribution among various locations. This enables organization-wide client/server communications across distinct departments, even if servers are located remotely.

In contrast, Layer 3 switching applications offer distinct advantages, notably low latency. Unlike traditional routers that receive and analyze the entire datagram (store and forward), Layer 3 switches employ cut-through switching. This method allows routing decisions based solely on the first part of the datagram containing IP addresses, significantly reducing network latency—a crucial benefit across diverse environments. For instance, in environments like supercomputers with storage linked via iSCSI, Layer 3 switches optimize performance by replacing costly advanced routers with similar throughput and latency levels. Functionally akin to traditional routers, Layer 3 switches determine paths based on logical addressing, perform Layer 3 checksums solely on the header, employ Time to Live (TTL), process option information, update SNMP managers with MIB information, provide security features, and more.

The major benefits of Layer 3 switching encompass hardware-based packet forwarding, high-performance packet switching, scalable high-speed capabilities, low latency, cost-effectiveness per port, and Quality of Service (QoS) enhancements.


Choosing Between Layer 2 and Layer 3 Switches

Choosing between a Layer 2 and a Layer 3 switch depends on various networking factors including the size of your network, the number of devices connected, and your network’s traffic pattern. The key criteria are:

CriteriaLayer 2 SwitchingLayer 3 Switching
CostVery cost-effective to small or medium-sized organisationsMore expensive and suits large organisations with complex networks
Set-up and ConfigurationSimple to set up and manageRequires advanced configurations to set up and manage, mostly requiring dedicated IT resources
Routing capabilitiesNoneOffers routing between different network segments
ScalabilityLimitedVery high
SecurityNo built-in security featuresBuilt-in security features such as access control lists, network segmentation with VLANs, authentication and more…
Quality of Service (QoS)No QoS features to improve packet switchingSeveral QoS features enabling prioritisation of different types of network traffic, ensuring critical applications get the bandwidth required.


Now that we’ve established the criteria, it’s clear that small to medium-sized networks, characterised by a limited number of devices and straightforward traffic flow, can effectively operate with Layer 2 switches. As previously mentioned, these switches are not only budget-friendly but also simple to configure, and they excel at facilitating high-speed data transfers within a single network segment. On the other hand, for larger, more intricate networks boasting multiple segments and more demanding traffic patterns, Layer 3 switches and routers are the preferred choice. This preference stems from the fact that Layer 3 switches can route traffic between network segments, offer advanced security features, and enable the implementation of quality of service (QoS) measures.


Choosing the right Layer 2 and Layer 3 switch

Having a clear understanding of the disparities between Layer 2 and Layer 3 switching and selecting the most suitable switch for your networking requirements is crucial for optimizing network performance. RAD’s ETS-1 series of Ethernet access switches offers 1G/10G end-user connectivity, catering to the needs of large-scale corporate networks, small and medium-sized businesses, as well as service providers. The ETS-1 boasts both Layer 2 and Layer 3 capabilities, delivering an exceptional cost-performance ratio along with Power-over-Ethernet functionality. Additionally, it incorporates advanced Ethernet OAM, Quality-of-Service (QoS), and other network service assurance features to ensure seamless operation and reliability.

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