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Right now, iSCSI is seeing quick acceptance at the low end (especially with Windows and Linux). iSCSI at 10 Gb looks like a slam dunk over Fibre Channel at 2 or 4 Gb, but this might not be the case. iSCSI requires quite a bit more CPU time than FC. This isn't a problem at 1 Gb with 2 GHz CPUs, but might start looking serious at 10 Gb. Without a similar bump in CPU power, performance will suffer. It gets really serious when IPsec encryption is used. One solution to this problem is the hardware-accelerated iSCSI HBAs (sometimes called TOE NICs) that are coming along now. So I'd wager that 10 Gb iSCSI will be quite competative with FC, but only with hardware HBAs. And this might reduce the "low cost" angle substantially!
Read Brett Cooper's answer to this question.
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