Subnetting allows you to create multiple logical networks that exist within a single Class A, B, or C network. If you do not subnet, you are only able to use one network from your Class A, B, or C network, which is unrealistic.
Each data link on a network must have a unique network ID, with every node on that link being a member of the same network. If you break a major network (Class A, B, or C) into smaller subnetworks, it allows you to create a network of interconnecting subnetworks. Each data link on this network would then have a unique network/subnetwork ID. Any device, or gateway, connecting n networks/subnetworks has n distinct IP addresses, one for each network / subnetwork that it interconnects.
In order to subnet a network, extend the natural mask using some of the bits from the host ID portion of the address to create a subnetwork ID. For example, given a Class C network of 204.17.5.0 which has a natural mask of 255.255.255.0, you can create subnets in this manner:
The network subnetting scheme in this section allows for eight subnets, and the network might appear as:
Figure 2
Notice that each of the routers in Figure 2 is attached to four subnetworks, one subnetwork is common to both routers. Also, each router has an IP address for each subnetwork to which it is attached. Each subnetwork could potentially support up to 30 host addresses.
This brings up an interesting point. The more host bits you use for a subnet mask, the more subnets you have available. However, the more subnets available, the less host addresses available per subnet. For example, a Class C network of 204.17.5.0 and a mask of 255.255.255.224 (/27) allows you to have eight subnets, each with 32 host addresses (30 of which could be assigned to devices). If you use a mask of 255.255.255.240(/28), the break down is:
Take a look at how a Class B network might be subnetted. If you have network 172.16.0.0 ,then you know that its natural mask is 255.255.0.0 or 172.16.0.0/16. Extending the mask to anything beyond 255.255.0.0 means you are subnetting. You can quickly see that you have the ability to create a lot more subnets than with the Class C network. If you use a mask of 255.255.248.0 (/21), how many subnets and hosts per subnet does this allow for?
Note: In the past, there were limitations to the use of a subnet 0 (all subnet bits are set to zero) and all ones subnet (all subnet bits set to one). Some devices would not allow the use of these subnets. Cisco Systems devices allow the use of these subnets when theip subnet zero command is configured.