What is the Largest Single Cost Category in Your IT Hardware Budget?
If you're like most of the enterprise customer organizations that were surveyed when we were designing Windows Server 2012, your answer is probably the same as theirs: STORAGE! For the organizations we surveyed, we found that as much as 60% of their annual hardware budgets were allocated to expensive hardware SAN solutions due to ever-increasing storage requirements.

Wouldn't it be nice to have some of that budget back for other IT projects? YES! We agree too ... that's why the server team included "Storage Spaces" in Windows Server 2012!

Get Ready for "Storage Spaces"!
"Storage Spaces" is a new storage virtualization technology that's included in Windows Server 2012 and our FREE Hyper-V Server 2012 to provide SAN-like storage capabilities and performance using commodity hardware components, such as industry standard servers and JBODs (ie., "Just a Bunch Of Disks").  When designing the Storage Spaces feature, we leveraged the storage expertise we've gained with our public cloud offerings (Windows Live, Live@Edu, Bing, Office 365 and Windows Azure) where we've been supporting scalable, world-wide storage solutions on commodity hardware for the past several years. The result is a software-driven solution that provides storage features like pooling, abstraction, fault tolerance and thin provisioning for a fraction of traditional storage hardware costs.

You mentioned "Thin Provisioning" ... How Does That Work?
Thin provisioning allows you to easily abstract the size of a virtualized disk away from the underlying physical disk storage capacity.  It gives you great flexibility in that you can setup your volumes with the capacity that you know you're going to need over the next several years without requiring an equal upfront hardware investment in disk capacity.  So ... you say that you know you're going need 3TB of storage on a volume in the next three years, but only have 1TB of physical disk capacity right now?  No problem!  Thin provision your virtualized disk space today for 3TB and just incrementally add more physical disks into the underlying Storage Pool down the road when you need them!

NOTE: Thin provisioning works great for production workloads and provides us with new flexibility for managing long-term storage needs, BUT if you are using Failover Clustering there are special requirements to ensure that clustered storage is always accessible when needed.  When setting up Storage Spaces for clustering scenarios, you'll need to use Fixed Provisioning, rather than Thin Provisioning.  You can read about the complete requirements when clustering Storage Spaces here.

Disk IO Performance Must Be Pretty Sloowww ... Right?
Actually, the disk IO performance achievable with Storage Spaces can be quite comparable to dedicated storage hardware solutions!  Storage Spaces gives you, as an IT Pro, the ability to engineer a storage solution for the right balance of performance and capacity that your applications require.  However, it might require you to rethink some of your storage architecture a bit - instead of using expensive intelligent RAID controllers, storage processors and SAN switches to achieve high performance, Storage Spaces requires that you think about disk IO a bit differently to gain maximum performance.  With Storage Spaces, the storage "intelligence" is handled by software components, so the best thing you can do to increase overall disk throughput is to increase the # of IO channels with multiple disk HBAs (ie., "Host Bus Adapters") and spread IOs across a large number of fast disk spindles.

In fact, we recently demonstrated a solution that leveraged 5 SAS HBAs and 40 SSD disks in a single industry standard server to achieve over 1 million IOPS in disk performance ... for $50,000 USD including the server hardware, software and all storage components!

Of course, performance is not always the main driving factor in storage needs - many Tier-2 or Tier-3 storage requirements favor economical storage capacity over raw performance.  In these scenarios, even if you already have a dedicated Tier-1 hardware storage solution, you may still consider Storage Spaces for your other Tier-2 and Tier-3 storage needs.  I see a lot of IT Pros looking at Storage Spaces as a storage solution for Disaster Recovery, Archiving and Backup scenarios.