Unmanaged Switch
Operates at Layer 2, getting data frames from host to host. But they are completely transparent to those network hosts and the people who use them.
Managed Switch
Operates at Layer 2 or Layer 3, and it gives the administrator of the network ways to modify the operation of the switch. This can be in the form of direct control over the switch and setting up ongoing traffic optimizations for the network.
How should I choose between managed and unmanaged switches?
Unmanaged switches are most often seen in very small, uncomplicated networks with only a dozen or so devices connected and without critical requirements for security and availability.
Managed switches, with the flexibility and control they provide, are a must for networks where reliability and security are critical. Typically, such networks power enterprise-level businesses, government agencies, universities, and healthcare organizations.
While managed switches cost more than unmanaged switches, the range of models available mean that there are different levels of complexity and cost for businesses of all sizes.