Traditionally, switches send traffic only to hosts within the same broadcast domain (Single VLAN) and routers handled traffic between different broadcast domains (Different VLANs). This meant that network devices in different broadcast domains could not communicate without a router.
With SVIs the switch will use virtual Layer 3 interface to route traffic to other Layer 3 interface thus eliminating the need for a physical router.
VLANs reduce the load on a network by dividing a LAN into smaller segments and keeping local traffic within a VLAN. However, because each VLAN has its own domain, a mechanism is needed for VLANs to pass data to other VLANs without passing the data through a router.
The solution is to use switched virtual interface – SVI. An SVI is normally found on switches (Layer 3 and Layer 2). With SVIs the switch recognizes the packet destinations that are local to the sending VLAN and switches those packets and packets destined for different VLANs are routed.
There is one-to-one mapping between a VLAN and SVI, thus only a single SVI can be mapped to a VLAN. In default setting, an SVI is created for the default VLAN (VLAN1) to permit remote switch administration.
In most typical designs we have the default gateway for the hosts pointing to the switches SVI, then the switch will route the packets to rest of the Layer 3 domain.
Note: An SVI cannot be activated unless the VLAN itself is created and at least one physical port is associated and active in that VLAN. Unless the VLAN is created there will be no spanning tree instance running hence the line protocol will be down for the SVI VLAN.
Creating an SVI
SWITCH(config)#interface vlan 20 <- Creates an SVI for Vlan 20
SWITCH(config-if)#description SALES <- Updates a description
SWITCH(config-if)#ip address 10.0.0.1 255.255.255.0 <- Assigns IP address to SVI
SWITCH#sh ip interface brief | i Vlan
Interface IP-Address OK? Method Status Protocol
Vlan1 unassigned YES unset up down
Vlan20 10.0.0.1 YES unset up down