So we have to define HSM and SAN:
HSM is meant to be a scheme of having unaccessed data stored nearline or offline in order to prevent from upsizing your disk space all the time. HSM stores data hierarchical (as the name says) - this means:
you have data that was not touched for lets say half a year; so HSM moves data from your expensive RAID5-system to cheaper CD-Library (burns data to CD). Your CD-Library though will fill up and before you buy another HSM stores this data maybe on DLT-tape or other MO/DVD and you put this tapes/disks to your safe and your data is now offline. If a user needs that data, HSM requests the appropriate medium and stores it back to your harddisk. This is HSM in short.
SAN on the other hand is a technologythat enables you to attach a harddisk or diskarray direct in the network - without a server that manages this data. SAN-devices typically have a webbased console. You give them a IP-Adress, set the security parameters and take the disk online. This is SAN.
So we are talking about absolut different technologies!
SAN-devices have to be backed up too. But no server is attached! So new Backupsoftware has to support that devices. CA Arcserve 2000 e.g. does!
HSM is alive and well (although I cant remember to have seen an installation anywhere). HSM has to be supported by your Network OS (Novell does, NT I am not sure) and your backupsoftware (Arcserve does - others I don't use, but the homepage of your backup-software-vendor should tell).