Understanding Layer 2 vs Layer 3 Networking

There are many questions that come to mind when selecting a Layer 2 vs Layer 3 network topology and/or a managed service provider. Surprisingly, Layer 3 services can be managed by the right service provider at little or no additional cost if you understand the difference and ask the right questions.

So, what are the questions?  Here’s a list: How many physical sites are on the school district or municipal network and is there a requirement to add locations now or in the future, such as town hall, the police department, or a third party?  Will all data reside on the Local area Network at one physical location or will data need to be shared across multiple locations?   Is the data traffic on the network expected to be light or heavy?  Are there peak periods during the day when heavy data traffic can impact computer response time?   Will additional IP enabled applications be added to the network in the future, such as voice, video surveillance, access controls, HVAC controls, etc.?  Are any of the existing or future applications susceptible to poor response time or poor media quality due to delays or latency on the network? For example, poor voice quality.

The major difference between Layer 2 vs Layer 3 networks has to do with addressing. Better yet, think of it as local addressing vs long distance addressing.   Layer 2 networks use what is called a MAC address (which stands for Media Access Control Address) to send data around a local area on a Switch. The MAC address is a local, permanent and unique name for the device — think of it as the floor and room number of your office or school. The Switch represents the doors and hallways in your office area.

Layer 3 networks use an Internet Protocol (IP) Address to send information between larger networks or physical sites using Routers. This information represents your virtual address in the physical world, the same way your mailing address tells FEDEX how to find you. Instead of using a street address, street name, city, state, and zip code, the IP Address uses these four sets of numbers (see diagram) to narrow down your location in the virtual world. The Router is similar to FEDEX or UPS as they direct the physical transport of packages or letters from one location to another.


Using our addressing examples from above, if you need to send data to the office next to you, use Layer 2. If you need to send the data to other buildings in the district or outside of the school district, use Layer 3.

Now that you know the difference between the two layers, the decision point comes down to purchasing and managing the required Layer 3 router hardware or selecting a managed service provider that will design and manage the Layer 3 infrastructure like FEDEX handles packages, efficiently and on-time.  So, ask your service provider a question, do they provide and manage a Layer 2 or a Layer 3 network?

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