Most small businesses don't use file servers, a specialized PC that is just used to share files among workers. In the past, these PCs were expensive, ran a different operating system from the ordinary Windows XP or Vista, and made it easier to connect to printers and backup tape drives. Because they were expensive, many smaller businesses just opted to store shared files on someone's desktop.
Having a file server has its advantages though: your business critical files are stored on something that has more protection because it doesn't have one of your users sitting in front of it all day, surfing the Web and getting infected with e-mails. You can lock it in a closet to prevent theft, too.
Lately, prices have come down - there are many options for less than US$1000, and some considerably less. Many products allow your files to be shared not only across your local network, but make them also accessible on the Internet as well. Before you consider buying something, you need to answer these questions: First, do you want redundant drives so you have some protection in case one fails? Second, how much storage do you need? Third, do you want to assemble a server or buy something ready-made? Finally, do you need support for both Windows and Macintosh clients on your network?
If you don't care about redundancy and want the cheapest possible solution, then consider PogoPlug. It is a $100 adapter that has USB on one side and Ethernet and AC power on the other. Any USB drive can be shared across your network and via a Web browser across the Internet. Given that even fairly large USB drives are less than $100 themselves, this can get you up and running quickly.
Another simple solution is to add a USB drive to your Wifi router. Linksys offers a feature called Storage Link on some of their newer routers such as the WRT610N that allow you to connect any USB hard drive to it and share it across your network, and also access it via FTP across the Internet as well. The setup process is somewhat clunky, but if you are in the market for a new router this could be a very inexpensive way to share a few files. I wouldn't recommend it as an ongoing file storage solution though.
Neither of these products solves the drive redundancy issue. For that, you want to buy a Network Attached Storage (NAS) device. If you want to buy an enclosure and add your own SATA storage drives, then take a look at what D-Link makes with its DNS-321 -- for $150 you get a box with two drive bays. Another inexpensive NAS is from WD called MyBook, which is what I use because it supports both Windows and Mac clients. However, the software that shares it across the Internet (called Mionet) is miserable. If you like to tinker with your equipment, there is an active community of people who have modified their MyBooks.
All of the units I have mentioned are slow, meaning when you want to copy a large video file across the network it will take minutes, or longer. If you are worried about performance and also want to use that as a good starting place to buy a NAS device, then check out SmallNetBuilder's comparison chart of dozens of different ones here. Better options include the models from Buffalo Technology, and they have the ability to get their files from the Internet too. For less than $400, you can buy a terabyte of redundant storage.
David Strom is a former editor-in-chief of Network Computing, Tom's Hardware.com, and DigitalLanding.com and an independent network consultant, blogger, podcaster and professional speaker based in St. Louis. He can be reached at email@example.com.