One thing that you may have noticed during our look at subnetting was that each and every subnet defined was exactly the same size, based on a single subnet mask value. While this is simple, it is again very wasteful. In most organizations, LANs are not all the same size. While some subnets may have hundreds of hosts, others may have a very small number, perhaps 10 or 20. More obvious still is a WAN link connecting two locations, which only requires 2 addresses. In cases where you have subnetted a Class B network using a /20 mask, that leaves you with a fixed 4094 hosts per subnet. On a WAN link, that alone would mean wasting 4092 addresses!
While you may have plenty of subnets and address space for your smaller network, on very large networks proper address management can be crucial. Using Variable Length Subnet Masks (VLSM), this problem can be solved. VLSM allows you to use different subnet mask values throughout a network, in order to better account for how many hosts you have on each subnet. Like all classless addressing, VLSM relies on the associated subnet mask (prefix) information to be explicitly provided in order to determine the network portion of an address. While VLSM provides some very useful addressing capabilities, it also requires some careful planning.
