One IP network can be divided into smaller networks, called subnets. The following are reasons to divide your network:
Use multiple media---It can be impossible, inconvenient, or too expensive to connect all nodes to a single network medium when these nodes are too far apart or already connected to different media.
Reduce congestion---Traffic between nodes on a single network uses network bandwidth. As a result, more bandwidth is required when you have more nodes. Splitting a network reduces the number of nodes on a data-link network. Fewer nodes generate less traffic and, as a consequence, less congestion.
Reduce processor use---Because each node on a network must react to every broadcast, reducing the number of nodes reduces processor use and congestion.
Isolate a network---By splitting a large network into small networks, you limit the impact of one network's problems on another. Such problems can include network hardware failures, such as an open Ethernet tap, or software failures, such as a broadcast storm.
Improve security---On a broadcast network medium such as Ethernet, each node on a network has access to all packets sent on that network. By enabling sensitive network traffic on only one network, other network monitors can be prevented from accessing this sensitive traffic.
Make efficient use of IP address space---If you are using a Class A or B network number and have multiple small physical networks, you can divide the IP address space into multiple IP subnets and assign them to individual physical networks. Another option is to obtain several Class C network numbers, although this is less desirable.
