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I am looking for a SAN solution, but can't afford even entry level solutions. Basically, the SAN is for development and a proof of concept product. The performance doesn't have to be amazing, but needs to be functional.

My buddy says we should just setup sotware RAID and software iSCSI in Linux. Essentially I have a spare server with dual Xeon processors, 4GB of memory, and (2) 500GB 7200RPM drives. It's a bit old but working.

I am sure there is reason people don't do software RAID and iSCSI, but will performance be usable? Thinking of configuring the drives in RAID 0 (for performance).

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"people don't do software RAID and iSCSI" where do you get that? –  Javier Jan 11 '11 at 17:55
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Try NexentaStor Community Edition. It's a canned NAS/SAN solution. You may need additional disks to hold the OS.

Also check FreeNAS or Openfiler.

These products are purpose-built for what you're looking to do and they work on a wide range of hardware.

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Have to agree with this. It's exactly what the asker is looking for. –  RobM Jan 11 '11 at 19:35
    
Yeah just slap openfiler on a box and call it a day. It's not suitable for production use (IET used by OpenFiler screws up SCSI locking once you stack a lot of stuff onto it) but it's ideal for a test environment. –  Chris Thorpe May 8 '11 at 4:57
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http://www.zfsbuild.com/

Yes. Well, OpenSolaris. If you want to go large, it is hard to beat, much as I like Linux.

Granted, they used enterprise and consumer grade SSD plus traditional disks for storage.

But what you want to do should work, it's just that your clients with be sharing two disks total, so performance will be less than stellar. Also, what is the cost of losing all your data if you loose one disk?

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