The computer network of an organization has a NAT with 192.168/16 IP address range. There is a department with a server that has an IP address 192.168.x.y and this server handles hosts of this department with another NAT with the IP address range 172.16/16.
Thus there are 2 layers of NAT. Why don't they have subnetting instead. This would allow easy routing.
I feel multiple layers of NAT can cause performance losses. Could you please help me compare the two design strategies.
@Jon Some more information
In discussion with a friend, we realized that subnetting would cause the following problem. The ARP requests of a computer would flood the entire organization's network. If the router does not forward these requests then PC's in one department will not be able to connect to PC's in other departments which anyway cannot be done if they are behind different NATs. With a packet sniffer we saw that there is a large number of ARP requests as most computers in the department have File Sharing on Windows enabled.
How to solve this problem?
Also if two computers are behind different NATs then is there no way for them to connect to each other.