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In my current Windows Vista install (as well as other Window's installs), I can share files by sharing folders and having public directories. What's the difference between having an actual file server and having a computer that just shares files?

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Whatever you want or need it to be. E.g. proper server-grade hardware, or an optimized configuration. –  Daniel Beck Feb 21 '11 at 20:52

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People typically define a file server as a machine that is designed purely for sharing files. Such a machine could be anything, but generally a good file server should aspire to have the following features:

  • Minimalist OS
  • Minimal overhead software (i.e. little or no virus scan, etc.)
  • Automated update / self cleaning / self management features where possible
  • Fast hard disk storage
  • Redundant storage and / or automated backup
  • Fast network connection
  • Basic CPU, 2 physical cores at least. Low power preferred.
  • Reasonable amount of RAM, enough for OS + operations - The OS will use RAM as a "cache" since traffic from the network can sometimes be significantly faster than a hard drive can read / write
  • Uninterruptible power supply
  • Low-power consumption components

Such a machine does not need any form of graphical interface (therefore no graphics card or even monitor).

A regular computer does not generally have things like automated backup or even a UPS, and power consumption is much higher because of all of the extra things a regular computer does - graphics, sound, and CPU utilization. etc.

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