Layer 3 Switch VS. Router

In the OSI model, we know that traditional network switches operate at Layer 2 while network routers operate at Layer 3. Besides, switches are understood to be forward traffic based on MAC address, while routers perform the forwarding based on IP address. Layer 3 switches have a lot in common with traditional routers: they can also support the same routing protocols, inspect incoming packets and make dynamic routing decisions based on the source and destination addresses inside. For this reason, many networking beginners are puzzled over the definition and purpose of a Layer 3 switch. So what is on earth Layer 3 switch and how is it different from router?

Layer 3 Switch
Layer 3 switch is also called multilayer switch. It is a specialized hardware device used in network routing, which is conceived as a technology to improve network routing performance on large local area networks (LANs) like corporate intranets. A Layer 3 switch is both a switch and a router. So Layer 3 switch is a switch that can route traffic, and a router with multiple Ethernet ports has a switching functionality. It can switch packets by checking both IP addresses and MAC addresses. On this account, Layer 3 switches separates ports into VLANs and perform the routing between them, in addition to supporting routing protocols such as RIP, OSPF and EIGRP.
Layer 3 Switch VS. Router
From the basics of Layer 3 switch, it may seem to perform the same functionality with the router. In fact, they have some key distinction facts. The key differences between Layer 3 switches and routers lay in the hardware technology used to build the unit. The hardware inside a Layer 3 switch merges that of traditional switches and routers, replacing some of a router’s software logic with hardware to offer better performance in some situations. The table below illustrates the differences between Layer 3 switch and router.
Main Differences:
  • Cost - Layer 3 switch is much more cost effective than router for delivering high-speed inter-VLAN routing. High performance router is typically much more expensive than Layer 3 switch.
  • Port density - Layer 3 switch has much higher port count while router has a lower port density than Layer 3 switch.
  • Flexibility - Layer 3 switch allows you to mix and match Layer 2 and Layer 3 switching. It means that you can configure a Layer 3 switch to operate as a normal Layer 2 switch.
  • WAN technologies support - Layer 3 switch is limited to usage over LAN environment where Inter VLAN routing can be performed. However, when it comes to working on WAN and edge technologies, Layer 3 switch lags behind. Router is the front runner in such scenario where WAN technologies such as Frame Relay or ATM need to be fostered.
  • Hardware/Software decision making - The key difference between Layer 3 switch and router lies in the hardware technology used to making forwarding decision. Layer 3 switch uses ASICs for forwarding decisions. Conversely, the router makes forwarding decisions based on hierarchical Layer-3 addresses.
Layer 3 Switch with VLANs
As here is mentioned the VLAN, so let’s talk about it firstly. A VLAN (virtual LAN) is a logical subnetwork that can group together a collection of devices from different physical LANs. VLANs can improve the overall performance of busy networks. So they are often set up for improved traffic management by larger business computer networks. With a VLAN, traffic can be handled more efficiently by network switches.
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. The diagram below shows an example of a layer 3 switching routing between VLANs through its two VLAN interfaces.

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
Conclusion
From what we have discusses, Layer 3 switch may be more preferable in result of its capability of routing and switching. Besides, it can perform as a top of rack device and a distributed core switching layer at the same time. This reduces the L2 complexity of the client access layer, which makes the network more reliable and easier to manage. 

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