The Old Story
Every year purchase new server(s) loaded with as many disk as it can handle. Install software and transfer data from the old servers (3-4 years old) that go out of business due to reliability consideration and increased need of storage space.
The 3-4 years old servers with their disks could be used for another 1-2 years for less critical applications.
In result a lot of useful otherwise disk space is lost every year and new expenses for storage are required.
The SAN Story
Consider SAN storage and disk less servers attached to the storage. The servers boot direcly from the SAN storage LUNs. The data disks are LUNs from the SAN presented to the coresponding server.
The server become old and has to be retired or just need to be replaced with new more powerfull machine. Move the old server HBA cards to the new server and attach it to the SAN. That is all. No need to copy data, no need to reinstall the software. No disk storage lost.
SAN general advantages:
Storage efficiency. SAN systems allow for better disk capacity utilization. Create LUNs with the minimum size required, then increase the size as needed. Share the total storage space between all servers and provision each of the servers with the required capacity.
Systems can be restored for short time without data lose. New servers can access LUNs on faulty servers.
In virtualization environment provide ability for utilizing High Availability and Load Balancing. Virtual machines can be moved from one virtualization host to another without interupting the operation. Virtual machines also can utilize SAN's LUNs directly -> Pass-Through Disks.
Considering SAN implementation may require higher initial expenses and professional maintenance afterwards they would be efficient for companies with more than 3-4 servers and more than 1 TB server storage capacity required for all servers.