The initial focus of the TeraStation was towards home and Small Office/Home Office (SOHO) users, and the device was designed to meet their needs. During production, the TeraStation project faced several challenges, such as procuring quality hard drives while keeping the product price below $1,000, and designing a chassis that can house four drives and a full-sized power unit while keeping a compact form factor. The Buffalo engineering team successfully overcame these hurdles and launched the first TeraStation model in December of 2004.
Once the first TeraStation was launched, it immediately garnered a small but dedicated following in Japan, the US, and other countries. This following gained traction, quickly leading to the TeraStation receiving industry-wide recognition and several awards, including the Next Big Thing award at CES 2005. By the end of the first year, the TeraStation had sold 30,000 units worldwide and established itself as a highly-recommended data storage product by many SOHO and even enterprise users.