What’s a home server? Don’t know? You’re not alone. It’s an overarching, ambiguous term that’s been floating around the home network industry for years. The idea is that as storage demands grow, your network will require a centralized place for files accessible by multiple users – everything from e-mail to shared files and documents, to family photos, MP3 files and streaming media.

Recently, Mike Wolf, an analyst at Cahners In-Stat Group, took up the home server cause by suggesting in a report that “dropping storage prices and increasing demand to put network connectivity into both PC and non-PC devices” could signal the viability of a home server market in coming years.

Wolf says that “the idea of a home digital filing cabinet is starting to make more and more sense” for hobbyists and for home workers. There are “pockets of storage” around the house today, such as set-top boxes, digital broadcast satellite receivers and MP3 digital audio servers. An entertainment-centric home server could combine all these functions in one box. Two companies, Ucentric Systems LLC and DoBox Inc., have popped up and are working on home server gateway products.

But what about business applications? The more mundane office spreadsheets and household documents stored on the same server as kids’ homework, maybe?

“That’s going to be more of a grass-roots movement; more technical people setting up Linux servers in their basements,” Wolf says. “How much value can a home server add? As applications arise, we might see more centralized messaging in the house, but it’s going to take time.”

Assuming it has sufficient hard-disk space, you can enlist an old computer as a home network file server. Another option is to buy a network-attached storage server, although Wolf says prices need to come down before that trend takes off.

“Low-end NAS servers are US$500. We need to see a US$200 product,” he says.

If you’re intrigued by the idea of using an old computer as a centralized storage device, you might consider upgrading your computers to Windows XP. Wolf, who’s tested a beta version, says new features, wizards and improved documentation make home networking much easier. Tutorials include pop-up graphics that show you how to put the network together and what it should look like, and define terms such as “bridge” and “802.11b.”

Kistner is a managing editor for Network World (U.S.). She can be reached at tkistner@nww.com.