It's useful in a data storage scheme using multiple hard drives to share or replicate data between the drives. In other words, RAID combines multiple hard drives into 'one' unit so the server would see one HD rather than the number of HDs you have combined. This is mostly used for back ups.
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Hardware raid entails an extra physical device in your system that handles the additional raid features. These adapters depending on their quality or robustness will offload some of the work required to produce raid features from the system's CPU to the adapter. Some raid levels (such as raid 5) require special calculations for splitting up the data on to each hard drive. By offloading this work to an additional raid adapter, the system is able to spend more time processing more important information. Also, hardware raid adapters are for the most part required for any type of hot-swap capabilities.
Software raid is a cost effective solution. It is generally used when hardware raid is not available or not worth the additional cost. There are also certain limitations with software raid depending on the OS or raid implementation you are using. For example, Linux can not directly boot from a software raid 0 or 5 volume. The solution to this problem is to place your boot files on a software raid 1 partition.
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