There are now 2 major SAN philosophies in terms of design. The traditional design is called framed and is characterised by head units with disks attached. This stems from the principle of taking a pair of servers, attaching a lot of disks and sharing them out over a SAN.
The upside is that it’s been around for a long time and vendors have gotten extremely good at building them. However their reputation has generally let to them charging a premium on these when you want additional functionality such as replication etc.
They can potentially be scaled up to the biggest storage clusters and can have extensive connectivity options. The biggest downside is that it is very easy to incorrectly spec the head unit and buy too small or too much. Buying too small, the head units become a bottleneck and upgrade costs are excessively high – in some cases complete replacement. Buying too big means a massive amount of over-expenditure on a unit that will be underutilized for its entire life.
There are exceptions to this where they only have one option for a head unit no matter what capacity you buy. In general, performance on all framed SAN's can only scale in terms of additional spindles, and once a bottleneck is reached in the head unit, any further scalability can be costly.
Frameless SANS are a newer generation that are characterised by consisting of groups of self-contained units, each with their own controllers, disk, cache and connectivity. As more units are added, so capacity and performance scale. Groups of these units are usually managed as a single SAN and volumes usually span multiple of these units to gain performance or redundancy - sometimes both. The biggest advantage of this model is that you are never overspending on a head unit, and the head unit does not become a bottleneck for the disks. The downside to this model is that adding capacity generally gets more expensive the larger you grow, as you are buying more than a shelf of disks each time you add to the SAN. You are buying controllers, cache and capacity and this all adds to the incremental cost. Maximum scalability is also capped to the maximum number of units in a group.
As this model is relatively new, the vendors that made them needed to add to the value proposition, and several of them throw in all software value adds for the base price. This means that from a cost point of view, they can be far more attractive than the old framed SAN model if you want all the functionality they can provide, even if the incremental expansion cost is higher.
The bottom line - neither solution is perfect, and both have use cases in almost every level of business.