Now that you understand the concept and benefit of subnetting, consider the problem that arises with it. In case of class based subnetting, the first octet of the dotted decimal address tells which part of the address is the network component and which one is the host component. But when host bits are borrowed for subnetting, the class based boundaries do not apply and it is not possible to say which bits are network bits. To overcome this, a third component of IP addresses were added. These are called the subnet masks.