A network storage appliance is disclosed. The appliance includes a chassis enclosing a backplane, and a server enclosed in the chassis and coupled to the backplane. The appliance also includes storage controllers enclosed in the chassis, each coupled to the backplane, which control transfer of data between the server and storage devices coupled to the storage controllers. The storage controllers also control transfer of data between the storage devices and computers networked to the appliance and external to the appliance. The storage controllers and the server comprise a plurality of hot-replaceable blades. Any one of the plurality of blades may be replaced during operation of the appliance without loss of access to the storage devices by the computers. In one embodiment, the server executes storage application software, such as backup software for backing up data on the storage devices, such as to a tape device networked to the server.