It's a small computer. That is, a small case with a 3.5" drive backplane, a status indicator board (LCD & a few buttons, & LED indicators as well), and most importantly, a very small basic/simple motherboard (ITX format would be a strong possibility). It loads an OS & RAID software, which can be stored on the board, or even via a USB stick mounted internally.
So in a sense, it's hardware, but it's no different than how software RAID works on any computer. But it's not the same as a true hardware RAID card (or those features would be listed). I guess you could consider it a bit better than the usual FakeRAID, as it does have a small computer (processor & memory). Personally, I don't, as there's a couple of important features that truly separates these from say the Areca's or Atto's for example.
This means features, such as an NVRAM solution to the write hole issue in parity based RAID (5/6/50/60), which has no solution for software based systems. It would also be missing things like Partition Table backups in firmware, which are incredibly handy in rebuilding (they can salvage the array in cases software based RAID can't).
The advantage of what you're looking at is (linked storage system/"RAID in a Box"), it takes the load off the primary system (i.e. keeps from adding additional "lag" to an already slowish system). It's also allows for capacity expansion on a small system (limited drive locations), followed by some increase in throughput via load splitting <separate data to different arrays to improve performance, such as separating data, applications, and OS on individual drives> (using eSATA).
Hope this clears things up a little.
