Variable Length Subnet Masks (VLSM)

A Variable Length Subnet Mask (VLSM) is a means of allocating IP addressing
resources to subnets according to their individual need rather than some
general network-wide rule. Of the IP routing protocols supported by Cisco,
OSPF, Dual IS-IS, BGP-4, and EIGRP support "classless" or VLSM routes.
A simple example of a network using variable length subnet masks is found
in Cisco engineering. There are several switches in the engineering
buildings, configured with FDDI and Ethernet interfaces and numbered in
order to support 62 hosts on each switched subnet; in actuality, perhaps
15-30 hosts (printers, workstations, disk servers) are physically attached
to each. However, many engineers also have ISDN or Frame Relay links to
home, and a small subnet there. These home offices typically have a router
or two and an X terminal or workstation; they may have a PC or Macintosh as
well. As such, they are usually configured to support 6 hosts, and a few
are configured for 14. The point to point links are generally unnumbered.

Using "one size fits all" addressing schemes, such as are found in RIP or
IGRP, the home offices would have to be configured to support 62 hosts
each; using numbers on the point to point links would further compound the
address bloat.

One configures the router for Variable Length Subnet Masking by configuring
the router to use a protocol (such as OSPF or EIGRP) that supports this,
and configuring the subnet masks of the various interfaces in the 'ip
address' interface sub-command. To use supernets, one must further
configure the use of 'ip classless' routes.