SMDS stands for switched multi-megabit data service. By definition, SMDS is a high-performance, connectionless telecommunications service for packet switched data transport. An important thing to keep in mind about this service is that it is neither a protocol nor a technology. The SMDS service provider has absolute control over the use of more unique addresses, however the customer has absolute control over individual addresses. An Individual Address is a media access control layer (MAC) address in an E.164 format, and the customer can assign several addresses (up to sixteen for each individual SNI) to a single Customer Premise Environment (CPE) or assign assign a group address to several hardware devices. SMDS is often compared with ATM because of certain similarities. Both use cell relay transport, however ATM has a maximum length, which are 56,347 octets larger than SMDS. A common usage of SMDS is to have it run as a server within an ATM network. This is beneficial because it creates a connectionless datagram service with SMDS, and still utilizes all the benefits of an ATM network.

When compared to the OSI model, most of the work done by SMDS is operating

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