A: Not every IT environment is large enough to need a SAN. Some businesses don't have the budget to afford one or the in-house experience to use one effectively. However, almost every environment that plans a move to virtualization also desires that move to include high availability for VMs.
This use case is one of the primary reasons for the release of VMware's vSphere Storage Appliance. This appliance is intended to be a collection of either two or three ESXi hosts that store their VMs within locally attached storage. Using built-in replication, VMs created atop one host are automatically available atop other hosts as well. This replication enables VMware's high availability functionality to migrate VMs from a failed host to a working host, without the need for shared storage on a SAN.