A switch is more intelligent than an Ethernet hub, which simply retransmits packets out of every port of the hub except the port on which the packet was received, unable to distinguish different recipients, and achieving an overall lower network efficiency.
An Ethernet switch operates at the data link layer (layer 2) of the OSI model to create a separate collision domain for each switch port. Each device connected to a switch port can transfer data to any of the other ports at any time and the transmissions will not interfere. Because broadcasts are still being forwarded to all connected devices by the switch, the newly formed network segment continues to be a broadcast domain. Switches may also operate at higher layers of the OSI model, including the network layer and above. A device that also operates at these higher layers is known as a multilayer switch.
Segmentation involves the use of a switch to split a larger collision domain into smaller ones in order to reduce collision probability, and to improve overall network throughput. In the extreme case (i.e. micro-segmentation), each device is located on a dedicated switch port. In contrast to an Ethernet hub, there is a separate collision domain on each of the switch ports. This allows computers to have dedicated bandwidth on point-to-point connections to the network and also to run in full-duplex mode. Full-duplex mode has only one transmitter and one receiver per collision domain, making collisions impossible.
The network switch plays an integral role in most modern Ethernet local area networks (LANs). Mid-to-large sized LANs contain a number of linked managed switches. Small office/home office (SOHO) applications typically use a single switch, or an all-purpose device such as a residential gateway to access small office/home broadband services such as DSL or cable Internet. In most of these cases, the end-user device contains a router and components that interface to the particular physical broadband technology. User devices may also include a telephone interface for Voice over IP (VoIP).
Layer 1: - A layer 1 network device transfers data, but does not manage any of the traffic coming through it, an example is Ethernet hub. Any packet entering a port is repeated to the output of every other port except for the port of entry. Specifically, each bit or symbol is repeated as it flows in. A repeater hub can therefore only receive and forward at a single speed. Since every packet is repeated on every other port, packet collisions affect the entire network, limiting its overall capacity.
Layer 2: - A layer 2 network device is a multiport device that uses hardware addresses, MAC address, to process and forward data at the data link layer (layer 2).
Layer 3: - A layer-3 switch can perform some or all of the functions normally performed by a router. Most network switches, however, are limited to supporting a single type of physical network, typically Ethernet, whereas a router may support different kinds of physical networks on different ports.
A common layer-3 capability is awareness of IP multicast through IGMP snooping. With this awareness, a layer-3 switch can increase efficiency by delivering the traffic of a multicast group only to ports where the attached device has signalled that it wants to listen to that group.
Layer-3 switches typically support IP routing between VLANs configured on the switch. Some layer-3 switches support the routing protocols that routers use to exchange information about routes between networks.
Layer 4: - While the exact meaning of the term layer-4 switch is vendor-dependent, it almost always starts with a capability for network address translation, and may add some type of load distribution based on TCP sessions or advanced QoS capabilities. The device may include a stateful firewall, a VPN concentrator, or be an IPsec security gateway.
Layer 7: - Layer-7 switches may distribute the load based on uniform resource locators (URLs), or by using some installation-specific technique to recognize application-level transactions. A layer-7 switch may include a web cache and participate in a content delivery network (CDN).