What is a Router?

A router receives and sends data on computer networks. Routers are sometimes confused with network hubs, modems, or network switches. However, routers can combine the functions of these components, and connect with these devices, to improve Internet access or help create business networks.

Key Q&A

How does a router work?

Routers guide and direct network data, using packets that contain various kinds of data—such as files, communications, and simple transmissions like web interactions.

The data packets have several layers, or sections, one of which carries identifying information such as sender, data type, size, and most importantly, the destination IP (Internet protocol) address. The router reads this layer, prioritizes the data, and chooses the best route to use for each transmission.

How do routers help your business?

A common tool for modern network computing, routers connect employees to networks, both local and the Internet, where just about every essential business activity takes place. Without routers, we wouldn't be able to use the Internet to collaborate, communicate, or gather information and learn. 

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Routers can also provide security. Embedded firewall and content filtering software provide an additional protection from unwanted content and malicious websites without affecting your online experience.

A router isn't just for data transmission or Internet connections, though. Most routers allow you to connect hard drives and use them as file-sharing servers, or printers that can then be accessed by anyone on the network.

Types of routers

Core router

Core routers are generally used by service providers (i.e. AT&T, Verizon, Vodafone) or cloud providers (i.e. Google, Amazon, Microsoft). They provide maximum bandwidth to connect additional routers or switches. Most small businesses will not need core routers. But very large enterprises that have many employees working in various buildings or locations may use core routers as part of their network architecture.

Edge router

An edge router, also called a gateway router or just "gateway" for short, is a network's outermost point of connection with external networks, including the Internet.

Edge routers are optimized for bandwidth and designed to connect to other routers to distribute data to end users. Edge routers don't usually offer Wi-Fi or the ability to manage local networks fully. They typically have only Ethernet ports—an input to connect to the Internet and several outputs to connect additional routers.

Edge router and modem are somewhat interchangeable terms, though the latter term is no longer commonly used by manufacturers or IT professionals when referencing edge routers.

Distribution router

A distribution router, or interior router, receives data from the edge router (or gateway) via a wired connection and sends it on to end users, typically via Wi-Fi, though the router usually also includes physical (Ethernet) connections for connecting users or additional routers.

Wireless router

Wireless routers, or residential gateways, combine the functions of edge routers and distribution routers. These are commonplace routers for home networks and Internet access.

Most service providers provide full-featured wireless routers as standard equipment. But even if you have the option to use an ISP’s wireless router in your small business, you may want to use a business-level router to take advantage of better wireless performance, more connectivity controls, and security.

Virtual router

Virtual routers are pieces of software that allow some router functions to be virtualized in the cloud and delivered as a service. These routers are ideal for large businesses with complex network needs. They offer flexibility, easy scalability, and a lower entry cost. Another benefit of virtual routers is reduced management of local network hardware.

How to choose small business routers


Pay close attention to the numbers and types of ports (such as phone, Ethernet, cable, and USB) to make sure you can connect the necessary devices. Remember that unused ports are fine to have, as they allow you to expand the network when needed.


Sufficient bandwidth is important for user experience. It ensures maximum performance for multiple users: the more users, the greater the bandwidth needed. You can grow your business's network by adding additional routers or hubs if necessary, but insufficient bandwidth anywhere in the network can cause bottlenecks.

Wireless capability

Wi-Fi is a given, but there are different standards. The latest, Wi-Fi 6 (802.11ax), can deliver much higher transmission speeds, especially when multiple access points (such as devices or additional routers) are connected at once. Wi-Fi 6 routers are backwards-compatible with old Wi-Fi standards.

Simplified setup and management

Most routers provide a browser-based interface that connects directly to your router to perform setup and admin. However, many manufacturers now offer mobile apps that are specially designed for their devices and provide more intuitive interfaces and easier setup.


Your router should at least offer WPA or WPA 2 password protection. Some routers also have firewall software, which continuously scans incoming data for potential malware and viruses. Another important tool is MAC (Media Access Control) address filtering, which uses device-specific IDs to screen users and build a whitelist or blacklist for network access.


Consider routers that have at least one power over ethernet (PoE) port. PoE provides both data and electricity power supply to external devices such as wireless access points, VoIP phones, IP and cameras. PoE eliminates cabling and provides additional flexibility to your networks.  

Automatic updates

Routers contain software that requires updates to maintain performance and security. Many manufacturers update software automatically, which is preferable because it happens in the background without any action on your part.

User changeable configurations

This feature allows you to manage network traffic, guest networks, parental controls, and security settings. The process is easier to handle if the router's configuration can be managed from an app as opposed to a browser interface.

Guest networks

Guest networks are an important layer of extra security for when guests visiting the business need Wi-Fi access. A guest network will limit access to the business's devices and files, while still offering connectivity to visitors.

Quality of service (QoS) controls

Combined with tools to look at usage across all users, this feature allows you to limit network use to up- or downstream transmissions, control for certain types of use (video streaming, for example), and specify bandwidth for different users. This feature helps you improve security as well as network monitoring.

Mesh networks

If you've had experience with Wi-Fi extenders, you may have found that they can do as much harm as good. They create multiple networks that don't communicate with each other, as well as device incompatibilities that can cause bandwidth bottlenecks.

A better solution is a mesh network, which allows you to place multiple Wi-Fi transmitters across your office, all on one network. Unlike extenders, which you can use with any wireless router, mesh networks require a router with this capability built-in.

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