External Storage API for WSS 3 available

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External storage APIs are available when you install hotfix 938499.  As to what these APIs are and how to utilize them is still a question. Looks like there will be a switch added in "stsadm.exe" utility as well - so chances are the some out of the box option is also provided to utilize these APIs.

Having this in place means documents and files (that are stored as blob objects in SQL database) can not be stored in external storage devices. I would imagin they could be other databases, file system or devices that act as a storage mechanism.

An external storage API is available for Microsoft Windows SharePoint Services 3.0. The external storage API lets you store documents or files on an external storage device other than Microsoft SQL Server. This API also lets you upgrade existing Windows SharePoint Services 3.0 sites to point to an external storage device.

The above is what is available in the KB article and documentation on external storage APIs is still at it's nascent stage so not many is available online.