Network - Layer 3 network

What do we mean when we talk about a Layer 3 network? Or when we say that this part of the network is operating at Layer 3? Simply put, it means that the network is configured for routing.

Take a look at this diagram:

Here we see that all switches are operating at Layer 3. This means that they are performing routing. As a result, the subnets/VLANs/broadcast domain configured on each of the two lower switches are contained within the switches themselves. They don't span multiple switches.

Such a configuration is hierarchical in nature, ensuring that the network is separated into multiple broadcast domains/subnets rather than having a flat structure like a Layer 2 network. As such, routing must be configured in order for communication between network segments to take place. This is typically configured using a router interface or an SVI as a default gateway.

Layer 3 refers to the Network Layer of the OSI Model.

Links

https://networklessons.com/cisco/ccnp-encor/cisco-campus-network-design-basics