Network appliances aren't a new concept. Cisco was an innovator of computers that do nothing more than route data packets on a TCP/IP network. Network Attached Storage (NAS) devices are file servers that have a specialized setup. Low-end systems (e.g., Quantum's Snap! Server, Hewlett-Packard's HP SureStore) let you quickly add storage to departmental networks, and very large NAS devices service major data centers. But the application of the network appliance to increasingly complex and specialized functions, such as Web serving, Web caching, providing security, and messaging, is new. And these types of products are appearing more frequently.

GartnerGroup estimates that the server appliance market will grow to nearly $16 billion by 2003. Network Appliance has grown to a $166 million company by selling network data servers. Compaq and Dell have licensed the Novell Internet Caching System (Novell ICS) technology to create appliance servers that cache Web pages and distribute those pages across the Internet. Distributed storage technology is one of the key technologies that the Internet2 organization is concentrating on because distributed storage solves bandwidth constraints that audio and video streams impose.

The factors driving our industry embrace the network appliance. Hardware is cheap, embedded OSs provide increasingly sophisticated functionality, and we're using distributed systems. In the future, building fault-tolerant systems will be a matter of plugging another server into the cluster. For example, Network Engines builds server appliances that use Plug and Play (PnP) technology to provide Web hosting and terminal services. Network Engines' WebEngine (Windows NT) and XEngine (Linux) are only 1" * 12" * 30", so you can stack 256 load-balanced, clustered servers in a rack. Network Engines targets ISPs and application service providers (ASPs).

The server appliance is the perfect device for embedded OSs such as embedded NT 4.0. Microsoft's insistence on using NT to distribute tasks helped fuel the server appliance market. Now, this developing market might challenge Microsoft to adapt embedded NT to compete with smaller and cheaper OSs, such as Linux, FreeBSD, or QNX Software Systems' QNX. Such competition would require different pricing and licensing schemes and the development of more features. Microsoft has its work cut out in this area, but many companies might be interested in writing software for embedded Microsoft OSs because the market has many experienced Microsoft programmers.

The industry is at the beginning of the appliance era, and the big hardware companies are aware of the trend. You can buy a small black-box server from a company such as Compaq, plug in the server, connect your clients to it, and be up and running with file and print services, email, Internet access, and a Web server in a few minutes. Some analysts worry about server appliances that interoperate with other network devices, servers, and OSs. These analysts are concerned about the management of these appliances through standard network-management software, and the appliances' usability. I believe that the marketplace will quickly weed out the poor performers. Specialized appliances are becoming attractive to administrators who wouldn't have considered them a year ago.