In this picture it seems that all machines have a 3.5" floppy disk inserted. Maybe they had no hard drive and only booted from floppy and then ran software over the network?

A lot of network interface cards had a socket for an option ROM that would allow network boot, but you could definitely fit a client on a floppy and boot that way, too. Novell Netware server would be the mostly likely server for that vintage of rig and a Netware client fit easily on a floppy.