Will Layer 3 Switches Give Routers the Boot?

Switches are the most common network device deployed on MSP-managed networks, while routers are the least popular—and not by a small margin.The Layer 3 switch can build both MAC and IP forwarding tables, enabling it to perform Layer 3 processing in hardware—meaning the Layer 3 switch is faster than a router.

The data in Auvik’s recently published report, Managing Network Vendor Diversity: The MSP Challenge, shows switches represent almost half (48%) of all network devices on MSP-managed sites, while routers account for only 6% of the total.

Does this mean the death of the router is imminent? In short, no—and here’s why.

Layer 2 vs Layer 3

Switches were built to connect devices on the same LAN and operate at Layer 2 of the OSI model—also known as the data link layer.

The main job of a Layer 2 switch is to process Ethernet data frames. And it does this far more efficiently than its ancestor, the old-school hub, which would simply retransmit packets in a blast without analyzing packet data.

By comparison, a Layer 2 switch has the ability to learn which ports correspond with which MAC addresses by using forwarding tables. This, combined with custom-built ASICs, means the switch can process packets at blazing speeds far superior to the hub.

Climbing up a layer on the OSI model, the router exists on Layer 3—the IP layer. In most small and mid-sized business (SMB) environments, routers were traditionally provided by the internet service provider (ISP), and were used to connect users to the broader network outside the LAN.

But here’s where it gets a bit more complicated. The router could also be used internally to route between different VLANs the Layer 2 switch carry. Picture it as a gate between your neighborhood and the rest of town: The router lets you communicate outside your neighborhood using IP addresses.

Here’s an example. An old-school SMB network has two different VLANs on the same switch—one for workstations, one for servers. For a workstation to access resources on a server, packets would have to cross from the workstation VLAN into the server VLAN. This requires routing since they’re two different neighborhoods.

The traffic would flow from the workstation VLAN to the router, and potentially back to that same switch as traffic returns from the server VLAN. That’s a long journey for a packet, especially since both VLANs are carried on the same switch. To eliminate a step (and a device), an even smarter switch was created.

Layer 2 vs Layer 3 Switches

So what is a Layer 3 switch? Essentially, a Layer 3 switch combines the capabilities of the Layer 2 switch and the router. Since it can operate at both layers, the Layer 3 switch has two purposes:

1. Connect devices on a LAN or VLAN using MAC addresses, and
2. Connect LANs or VLANs to the broader network using IP addresses.

Pros and cons of the Layer 3 switch

While Layer 2 switches use custom-built ASICs that process traffic very quickly, routers have to process traffic using the software since they often connect different types of hardware at the network level. This means routers can be slower than switches, which is one benefit of the Layer 3 switch.

The Layer 3 switch was born once Ethernet was standardized as the data link layer protocol, and IP was standardized as the network layer protocol. With these protocols, it can build both MAC and IP forwarding tables, enabling it to perform Layer 3 processing in hardware—meaning the Layer 3 switch is faster than a router.

However, while a Layer 3 switch can do more with one box, it tends to be more expensive than a Layer 2 switch. So if your client’s business is growing, and they need more than one 24-port or 48-port switch, you’ll have a decision to make. You can either create the network with several less expensive Layer 2 switches and a router or purchase several Layer 3 switches and eliminate the router.

Who needs a router?

The true necessity of a router depends on the structure of your client’s IT environment and their internal networking needs. On a small network with a couple of user devices that communicate mostly outbound, it likely makes economic sense to use an all-in-one box that includes Layer 2 routing (and firewall) functions without a dedicated switch.

Routers also make sense for large networks with hundreds of endpoints, as these businesses tend to require complex routing functions like quality of service (QoS) and network address translation (NAT) internally. While these capabilities may be available on high-end Layer 3 switches, they’re often too expensive compared to a dedicated router.

Of all types of client businesses, SMBs tend to need routers least. That’s because the only router on most SMB networks today is provided by the ISP to connect to its network. A router’s basic functionality (and way more) is built into most firewalls—so it’s likely an SMB could eliminate the cost and necessity of a router by connecting a Layer 3 switch to a firewall.

Regardless of the network structure that’s right for your client, routing as a function isn’t dying out—there are just more options than the traditional standalone router.

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