A Netmask must always be provided alongside a host IP Address to specify how many IP addresses there are on the network. In more technical terms, the Netmask tells the computer which bits of the IP address can change and the address still be part of the network.
For example a Netmask of "255.255.255.0" specifies that the last eight bits of the IP Address can change and still be an address on the local network. This means that if, for example, the IP address of the Server is 10.10.10.1, then all IP Addresses from 10.10.10.1 to 10.10.10.254 are members of the same LAN (10.10.10.0 and 10.10.10.255 are reserved). Looking at it mathematically, all IP addresses that give the same result when you perform a a bit-wise AND between the IP address and the Netmask are considered to be on the same network.
If you want to allow more than 254 computers on the LAN, including the Server, you will need to change the Netmask. Using "255.255.0.0" will allow 65534 valid addresses (10.10.0.1 to 10.10.255.254).
One reason for changing to this Netmask is if you want to manually allocate IP addresses to each PC and want to make the IP address reflect your companies organization. For example, you could reserve the addresses range "10.10.1.1" to "10.10.1.254" for Sales and "10.10.2.1" to "10.10.2.254" for Accounts.
The normal mode of operation when using the Server is that the PC's are given their IP address and Netmask automatically by the Server; so you do not need to worry about which PC has which IP address or whether their Netmasks are set correctly. This automatic configuration mechanism is called DHCP. If you change the Netmask to get more IP addresses (computers connecting in), and you are using DHCP, you may also need to alter the DHCP First and / or Last Addresses to ensure they are set within a suitable valid range.
The default values for this field is "255.255.255.0"