A method for automatically configuring a newly added component to a storage subsystem is disclosed. In response to a new component being connected to a storage subsystem, a determination is made whether or not the new component is a host computer or a disk drive. If the new component is a host computer, the new component is added to the storage subsystem as a host computer when the number of computer systems that can be supported by the storage subsystem has not yet been exceeded. If the new component is a disk drive, the new component is allocated to a pool of storage devices within the storage subsystem, wherein some of the pool of storage devices are held in reserve while some of the pool of storage devices are allocated to a host computer based on policy rules.