A major disadvantage of Ethernet 802.3 networks is collisions. Collisions occur when two hosts transmit frames simultaneously. When a collision occurs, the transmitted frames are corrupted or destroyed in the collision. The sending hosts stop sending further transmissions for a random period of time, based on the Ethernet 802.3 rules of CSMA/CD. Excessive collisions cause networks to be unproductive.

The network area where frames originate and collide is called the collision domain. All shared media environments are collision domains. When a host is connected to a switch port, the switch creates a dedicated 10 Mbps bandwidth connection. This connection is considered to be an individual collision domain. For example, if a twelve-port switch has a device connected to each port then twelve collision domains are created.

A switch builds a switching table by learning the MAC addresses of the hosts that are connected to each switch port. When two connected hosts want to communicate with each other, the switch looks up the switching table and establishes a virtual connection between the ports. The virtual circuit is maintained until the session is terminated.

In Figure , Host B and Host C want to communicate with each other. The switch creates the virtual connection which is referred to as a microsegment. The microsegment behaves as if the network has only two hosts, one host sending and one receiving providing maximum utilization of the available bandwidth.

Switches reduce collisions and increase bandwidth on network segments because they provide dedicated bandwidth to each network segment.