IT OT Convergence

How Ethernet Works

4 min read

How does Ethernet work?

Ethernet is the foundational communication standard for wired networks in both office and industrial environments. It enables fast, reliable data exchange between computers, PLCs, servers, HMIs and many other devices. But how exactly does Ethernet work? In this in-depth article we take a deep dive into the workings of Ethernet, including the OSI model, MAC addresses, IP addresses, subnets and default gateways.

🔌 What is Ethernet?

Ethernet is a communication technology defined by the IEEE 802.3 standard. It describes how devices on a local area network (LAN) can transmit and receive data over physical connections such as twisted pair (UTP), coaxial cable or fibre.

Key characteristics:

  • Defined frame structure (Ethernet frame)
  • CSMA/CD for medium access (in half-duplex)
  • Data rates from 10 Mbps to 400 Gbps
  • Widely supported in both IT and OT (industrial automation)

Ethernet operates primarily at the lower layers of the OSI model, but also influences how IP traffic works.

🏛 The OSI model in relation to Ethernet

The OSI model (Open Systems Interconnection) is a reference model that divides network communication into 7 layers:

Layer Name Ethernet-related?
1 Physical Yes: cables, connectors, electrical signals
2 Data Link Yes: MAC addresses, Ethernet frames
3 Network Indirectly: IP addresses, routing
4 Transport TCP/UDP
5-7 Session through Application Protocols such as HTTP, OPC UA, Modbus/TCP

Ethernet operates primarily at Layers 1 and 2, where it is responsible for the physical transmission of bits and the logical addressing via MAC.

🤖 What is a MAC address?

A MAC address (Media Access Control) is a hardware-burned address that uniquely identifies each Ethernet device at Layer 2. It is 48 bits long, usually represented in hex: 

00:1A:2B:3C:4D:5E

Properties:

  • Assigned by the manufacturer (first 3 bytes = vendor ID)
  • Does not change unless manually overwritten (spoofing)
  • Used in Ethernet frames as the source and destination address

A Switch uses MAC tables to route frames correctly within a LAN.

🌐 What is an IP address?

An IP address is a logical address at Layer 3 that is required for communication between devices within and outside of a subnet. IP addresses come in:

  • IPv4: 32-bit address (e.g. 192.168.1.10)
  • IPv6: 128-bit address (e.g. 2001:0db8:85a3::8a2e:0370:7334)

Devices use IP addresses to find each other at the network level. Ethernet carries IP traffic in the payload portion of the Ethernet frame.

Important: Before IP-level traffic can flow, the MAC address mapping via ARP must first be performed.

📊 Subnets explained

A subnet is a delimited network segment. The subnet determines:

  • Which IP addresses are considered “local”
  • Whether traffic can flow directly via Ethernet, or must go via a router

The subnet mask determines which bits represent the network portion:
IP address Subnet mask Network ID Range (hosts)
192.168.1.10 255.255.255.0 (/24) 192.168.1.0 192.168.1.1 to 192.168.1.254
10.0.5.34 255.255.0.0 (/16) 10.0.0.0 10.0.0.1 to 10.0.255.254

Traffic between subnets requires a router.

🚪 What is a Default Gateway?

A Default Gateway is the IP address of the router to which traffic is sent when the destination IP lies outside its own subnet. The gateway receives the traffic and routes it onwards.

For example:

IP: 192.168.1.20
Subnet mask: 255.255.255.0
Gateway: 192.168.1.1

All traffic destined, say, for 8.8.8.8 goes to the gateway, which forwards it externally.

🛠️ How does Ethernet work in practice?

  1. Device A wants to communicate with device B (e.g. ping or HTTP)
  2. A knows B’s IP, but not yet the MAC address → it sends an ARP request
  3. B replies with its MAC address
  4. A constructs an Ethernet frame:
  • Dest. MAC: of B
  • Source MAC: of A
  • EtherType: IP
  • Payload: IP packet with e.g. TCP/HTTP data
  1. The frame is sent via the Switch to B
  2. B receives and processes the data

If B’s IP does not fall within A’s subnet, then:

  • The frame is addressed to the MAC address of the default gateway
  • The router decides how the packet continues

🔄 Ethernet and industrial networks

In OT environments, Ethernet is often the basis for protocols such as:

In these cases, special attention is paid to:

📄 Summary: How does Ethernet work?

  • Ethernet uses frames with MAC addresses at Layer 2 of the OSI model
  • IP addresses at Layer 3 determine logical routing
  • Subnets determine whether traffic is local or must go via a gateway
  • A default gateway is needed for external traffic
  • In industrial environments almost everything runs on Ethernet, but with stricter requirements

By understanding Ethernet, MAC, IP, subnets and gateways, engineers gain full control over network behaviour, faults and performance.

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