IP storage is a general term for several approaches to using the Internet Prototol (IP) in a storage area network (SAN), usually over Gigabit Ethernet. IP storage is an alternative to the Fibre Channel framework of the traditional SAN. Proponents of IP-based storage claim that it offers a number of benefits over the Fibre Channel alternative, and will promote the wide-spread adoption of SANs that was predicted when they were first introduced. Although SANs have been around since the mid-to-late 1990s, they haven't enjoyed the market acceptance that developers expected. Fibre Channel issues, including expense, complexity, and interoperability issues are frequently cited as the cause. According to proponents, IP storage provides a solution to these issues that will enable the SAN to fulfill its early promise.
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Definition courtesy of WhatIs.com.