Today, BlueArc makes high-end network attached servers (NAS) that are known for their performance and scalability. While the venture-funded company may have just 1.4 percent of the total NAS market, Gartner ranks it number three behind behemoths EMC and Network Appliance in the NAS market’s high-end segment. "The market we classify as NAS is fast growing with a 16.7 percent [compound annual growth rate]," says Gartner analyst Roger Cox. "That’s the highest growth rate in the storage market. By 2007, it will be $3 billion in size."

Turning Software into Hardware

BlueArc has so far been able to compete with the big boys mainly by virtue of its unique, hardware-based architecture. Instead of building a server that relies on specialized software for managing its load, BlueArc bases its servers on custom-designed integrated circuits dedicated to simultaneously performing typical server tasks such as networking, file system and server management. Barrall says the migration of software into hardware and the parallel processing make the server run faster and more efficiently. Indeed, Vijay Agarwala, director of GeARS, Penn State University’s high-performance computing center, replaced three of his existing file servers with a single Si7500 file server from BlueArc.

In an effort to further differentiate itself from competitors and to respond to customers’ price fixation, the company released a new product last April called the BlueArc SiliconServer. It lets companies deploy different kinds of storage—such as high-speed, high-performance fibre channel and lower speed ATA—in the same NAS system. Using this multitiered approach to storage, customers can decide which applications should run on higher performance disks and which can run on lower performance—and lower cost—hardware. "In a competing system, everything has to be stored either all in fibre or all ATA," says Gartner’s Cox. He adds that mixing different types of storage on the same platform allows the CIO to configure a storage system that gives his company the best price-performance ratio.