The second misconception is that SAN means "big" and NAS means "small." There is no such association. Both SANs and NASs can be of nearly any scale or quality. They both run the gamut and there isn't the slightest suggestion from the technology chosen whether a device is large or not.
In fact, a SAN actually can technically come "smaller" than a NAS solution. However, although there are SAN products on the market that are in this category, it is very rare to find them in use.
The third misconception is that SAN and NAS are dramatically different inside the chassis. This is certainly not the case as the majority of SAN and NAS devices today offer "unified storage," meaning a storage appliance that acts simultaneously as both SAN and NAS.
The key difference between the two is not in backend technology or hardware or size or reliability. Instead, the defining difference is the protocols used to transfer storage. SANs are block storage exposing raw block devices onto the network using protocols like fibre channel, iSCSI, SAS, ZSAN, ATA over Ethernet (AoE) or Fibre Channel over Ethernet (FCoE). NAS, on the other hand, uses a network file system and exposes files onto the network using application layer protocols like NFS, SMB, AFP, HTTP and FTP which then ride over TCP/IP.
The fourth misconception is that SANs are inherently a file-sharing technology. This is NAS. SAN simply takes your block storage (hard disk subsystem) and making it remotely available over a network. The nature of networks suggests that we can attach that storage to multiple devices at once and indeed, physically, we can. But SAN is not intended for file-sharing. There are mechanisms available in special clustered filesystems and their drivers to allow for this, but this requires special knowledge and understanding. Many people acquiring SANs are unaware that they need these tools for what they often believe is the very purpose of the SAN — a disaster so common that I probably speak to someone who has done just this almost weekly.
The fifth misconception is that SANs are fast. SANs can be fast; they can also be horrifically slow. There is no intrinsic speed boost from the use of SAN technology on its own.
It is actually fairly difficult for SANs to overcome the inherent bottlenecks introduced by the network on which they sit. Some other storage options, such as DAS use all the same technologies as SAN, but lack the bottleneck and latency of the actual network an equivalent. As a result, DAS will be just a little faster than its SAN counterpart. SANs are generally a little faster than a hardware-identical NAS equivalent, but even this is not guaranteed. SAN and NAS behave differently, and in different use cases either may perform better than the other. SAN would rarely be chosen as a solution based on performance needs.
The sixth misconception is that a SAN eliminates the inherent problems associated with storage choices. A good example is the use of RAID 5. This would be considered bad practice in a server, but when working with a SAN (which in theory is far more critical than a standalone server) often careful storage subsystem planning is eschewed based on a belief that SAN technology has somehow fixed those issues or that they do not apply.
It is true that some high-end SANs do have some amount of risk mitigation features unlikely to be found elsewhere, but these are rare and exclusively relegated to very high-end units where fragile designs would already be uncommon. It is a dangerous, but very common practice, to take great care and consideration when planning storage for a physical server but skip that planning and oversight when using a SAN. You cannot assume that the SAN handles all of that internally or that it is simply no longer needed.
Now that we've shot down many misconceptions about SAN, you may be wondering if SANs are ever appropriate. They are, of course, quite important and incredibly valuable when used correctly. The strongest points of SANs come from consolidation and special types of shared storage.
Historically, customers sought out SAN solutions for consolidation. A SAN allows us to combine many filesystems into a single disk array, allowing far more efficient use of storage resources. Because SAN is block level, it is able to do this anytime that a traditional, local disk subsystem could be employed.