It’s pretty easy to diagnose a hardware problem once a device has completely died. The fact that a network interface card that has been working is suddenly showing no activity light on the back of the card might be a pretty good indication that the NIC is shot. And when you fire up a server in which a drive has gone belly up or the video card has gone bad, the system BIOS will usually alert you to a major hardware problem and provide a series of beeps as a tip off. An important part of troubleshooting a network is actually avoiding troubleshooting major hardware problems by staying one step ahead of the potential hardware pitfalls.
Most network operating systems will help you keep track of hardware performance. Not only can you monitor hardware devices such as the drives on a server, but you can also discern the relative health of the network itself using various network-monitoring software.