In 1998, Geoff Barrall was in London designing data centers as a consultant for customers including General Motors and BMW when he discovered the idea for his next business. One of Barrall\u2019s customers was experiencing bottlenecks on its servers, which couldn\u2019t keep up with the speed of the company\u2019s new gigabit Ethernet network. Barrall set out to find a server that could keep pace. When he concluded his search empty-handed, he came up with the idea for BlueArc, the company for which he is now executive vice president and CTO.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\u2019s 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\u2019s the highest growth rate in the storage market. By 2007, it will be $3 billion in size."Turning Software into HardwareBlueArc 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\u2019s 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\u2019 price fixation, the company released a new product last April called the BlueArc SiliconServer. It lets companies deploy different kinds of storage\u2014such as high-speed, high-performance fibre channel and lower speed ATA\u2014in 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\u2014and lower cost\u2014hardware. "In a competing system, everything has to be stored either all in fibre or all ATA," says Gartner\u2019s 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. "[BlueArc\u2019s multitiered approach] is going to allow companies to reduce their initial capital outlay for robust enterprise quality storage, and it\u2019s going to allow them to reduce their total cost of ownership over time," says Cox. And BlueArc\u2019s products are so scalable (they can deploy with as much as 200 terabytes of storage compared with competitors\u2019 2 to 6 terabytes), companies don\u2019t need to deploy as many units. "The fewer the number of units, the less costly it is to manage," adds Cox.An Uphill BattleMark Chandler, director of information systems at drug discovery company NeoGenesis Pharmaceuticals, concurs with Cox. "Backing up one large disk as opposed to many servers makes life so much simpler," he says. Chandler also likes BlueArc\u2019s competitive prices, which made him decide to stop purchasing from EMC. Barrall says BlueArc\u2019s products start at $40,000 and average between $100,000 and $200,000. Chandler also selected BlueArc over the competition because its servers are compatible with the two platforms his company runs, Windows and Linux. In spite of BlueArc\u2019s advantages (strong engineering and R&D, solid technology, good customer service and happy customers), the company still faces an uphill battle for survival. Cox notes that to break even, BlueArc is going to have to double its 2002 revenue of $19 million. And to do that, he says, the company needs to increase its visibility and credibility by partnering with resellers that focus on vertical markets, which would open another distribution channel.