An apparatus and method implemented in hardware and embedded software that improves performance, scalability, reliability, and affordability of Storage Area Network (SAN) systems or subsystems. The apparatus contains host computers (application servers, file servers, computer cluster systems, or desktop workstations), SAN controllers connected via a bus or network interconnect, disk drive enclosures with controllers connected via network interconnect, and physical drive pool or cluster of other data storage devices that share I/O traffic, providing distributed high performance centrally managed storage solution. This approach eliminates I/O bottlenecks and improves scalability and performance over the existing SAN architectures. Although this architecture is network interconnect (transport) neutral, additional improvements and cost savings could be made by utilizing existing, of the shelf, low latency and high speed hardware such as Advanced Switching (AS) or Myrinet networks as a transport for data, Small Computer System Interface (SCSI) and other commands and messages. Using AS or Myrinet network as a replacement for Fiber Channel (FC) would significantly reduce the cost of such SAN systems and at the same time boost performance (higher data transfer rates and lower latencies). This invention is about defining hardware and software architectural solution that is specifically designed to eliminate I/O traffic bottlenecks, improve scalability, and reduce the overall cost of today's SAN systems or subsystems. This innovative solution, in addition to it's performance superiority compared to the existing solutions, should also provide 100% compatibility with the all existing Operating Systems (OS), File Systems (FS), and existing applications.