The first routers were developed in software -- even today it's common to use a Unix box as a router but the first major commercial router efforts were implemented in hardware. Likewise, the first major load balancing product on the commercial market was not done in software but developed as an appliance. Cisco's Local Director was the first to market with a front end for a server farm, implemented hardware. This was only in 1996, a testament to just how relatively new this type of product is in the commerical market.

Local Director still enjoys a large market share though it's facing a wider breadth of competition; it is often the technology against which the other vendors measure themselves (it is Cisco, afterall!).

These days, hardware is getting a lot more clever.

Switches working higher than layer 3 in the OSI network model are being used in a number of situations to direct traffic to the best back end server(s) by looking at not merely which network segments sources and destinations sit on but what applications and data live on which segments.