There is more granularity in the device options today, allowing for more versatile device configuration. The switches are also getting larger, so rather than networking devices together to create a fabric of switches, you can leverage larger port counts in switches and directors which, in turn, can support multiple protocols or use blades to support protocol conversion and various speeds. Load balancing, optimization and virtualization, and other functionality are increasingly supported. This ultimately allows you to simplify things or establish configurations to avoid bottlenecks and single points of failure. We're seeing tiered access through the switches.
First, decide on your needs objectives. The question has become blurred because switches are getting larger on the whole. The difference between a switch and director used to be the number of ports, the performance, the supported protocols, the modular architecture of a director and the scalability. Today, we have switches that are 64 ports that offer a level of modularity and redundancy along with multiple protocol support. So, the traditional distinctions are fading.
I'd suggest taking a closer look at needs that consider ports (e.g., Fibre Channel (FC) or FICON, speeds (e.g., 1 Gbit, 2 Gbit or 4 Gbit), the need to oversubscribe ports, segmentation to isolate traffic workloads, distance requirements, scalability into the future and resiliency/redundancy requirements and so on. Then look at vendor offerings and consider products [switch or director]. Don't start with "director vs. switch," but instead consider the product that best fits your needs -- keeping future growth and needs in mind.
A word about intelligent switches, which typically support storage virtualization tasks: Separate the discussion from ordinary switches and directors. Intelligent switches are not the same as directors and vice versa. Today, you need to add a blade to a director to support "intelligence," such as virtualization, you're more likely to see that functionality deployed as a specialized blade in a dedicated appliance, though this will probably change with the next generation of blades. However, there are dedicated "intelligent" switches with emphasis on virtualization and other high-end features rather than switching. Many of those have fallen to the wayside except for purpose-built SAN appliances still in the market.
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