Scale out storage can do this by using specialized technology like that of 3PAR or by using a standard Intel Architecture like EMC's VMAX, IBM's XIV and HP's LeftHand Networks. On the NAS side companies like Isilon Systems and Symantec have similar architectures. For backup and archive there are storage companies like Permabit, ExaGrid and Sepaton. What you'll notice from this list is that scale out storage, once the domain of start ups, now has the attention of major storage manufacturers.
The grid or clustering capabilities of these systems should allow all the processing and bandwidth capabilities of the storage systems to be used across the storage platform. This means that as you scale these systems you do not have a loose collection of independent storage systems that are managed by a central management interface. In a grid or clustered storage system you are dealing with one entity.
What makes these systems so appealing is their ability to buy just the capacity and performance that you need now, then add performance, capacity or bandwidth when you need it. This compares favorably to the traditional dual controller or single head environment. Once these systems reach their performance maximum they require the purchase of another system or an upgrade to a faster one. In most cases you are forced to over buy capacity and performance and hope that you don't outgrow the system too fast. In either case you may end up paying extra for capabilities that you won't need for a few more years. If you could have waited that few more years to purchase that capacity or performance it would have been less expensive.
This is not to say that the classic storage architecture is dead and should be abandoned. If a single enclosure system can provide you all the performance and capacity that you can ever foresee needing then these systems are fine and should be initially less expensive. The range that classic storage architectures can cover continues to increase as the processing power and capacity per box ride the technology wave.
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George Crump is lead analyst of Storage Switzerland, an IT analyst firm focused on the storage and virtualization segments. Find Storage Switzerland's disclosure statement here.