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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 6/29/04  Network Appliance Inc             10-K        4/30/04    7:154                                    Bowne of Dallas I..01/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML  1,137K 
 2: EX-21.1     Subsidiaries of the Registrant                         1      7K 
 3: EX-23.1     Consent of Experts or Counsel                          1      7K 
 4: EX-31.1     Certification per Sarbanes-Oxley Act (Section 302)     2±    10K 
 5: EX-31.2     Certification per Sarbanes-Oxley Act (Section 302)     2±    10K 
 6: EX-32.1     Certification per Sarbanes-Oxley Act (Section 906)     1      6K 
 7: EX-32.2     Certification per Sarbanes-Oxley Act (Section 906)     1      6K 

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-K

Commission File Number 0-27130

Network Appliance, Inc.

495 East Java Drive,

Registrant’s telephone number, including area code:

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ         No o

     Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes þ         No o

     The aggregate market value of voting stock held by nonaffiliates of the Registrant, as of October 31, 2003, the last day of registrant’s most recently completed second fiscal quarter, was $5,868,275,326 (based on the closing price for shares of the Registrant’s common stock as reported by the Nasdaq National Market for the last business day prior to that date). Shares of common stock held by each executive officer, director, and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

     On May 28, 2004, 357,845,346 shares of the Registrant’s common stock, $0.001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     The information called for by Part III of this Form 10-K is hereby incorporated by reference from the definitive Proxy Statement for our annual meeting of stockholders to be held on September 2, 2004, which will be filed with the Securities and Exchange Commission not later than 120 days after April 30, 2004.

Table of Contents

PART I

      With the exception of historical facts, the statements contained in this Annual Report on Form 10-K are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to the safe harbor provisions set forth in the Exchange Act. Forward-looking statements usually contain the words “estimate,” “intend,” “plan,” “predict,” “seek,” “may,” “will,” “should,” “would,” “anticipate,” “expect,” “believe,” or similar expressions and variations or negatives of these words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. All forward-looking statements, including, but not limited to, (1) our plans to continue to expand on the appliance architecture in future product designs and service offerings; (2) the possibility that we may engage in future acquisitions; (3) our expectation that we will increasingly rely on our indirect sales channel for a significant portion of our revenue; (4) our expectation that the ultimate costs to resolve any outstanding legal claims or proceedings will not be material to our business; (5) our belief that the Spinnaker acquisition will accelerate the delivery of NetApp Storage Grid architecture; (6) our expectation that our Windows business will be a strong driver of the growth of our block storage solutions; (7) our intent to regularly introduce new products and product enhancements and our intent to support current and new products and product enhancements; (8) our expectation that our expenditures on expanding our current product offerings and introducing new products in order to capitalize on growth opportunities will increase in absolute dollars; (9) the possibility that we may need to increase our materials purchases, contract manufacturing capacity and internal test and quality functions to meet anticipated demand; (10) our intention to continue to establish and maintain business relationships with technology companies; (11) our belief that our existing facilities and those currently being developed in Sunnyvale, California will be sufficient for our needs for at least the next two years; (12) our expectation that we will continue to add sales capacity; (13) our expectation that we will increase sales and marketing expenses commensurate with future revenue growth; (14) our belief that our general and administrative expenses will increase in absolute terms in fiscal 2005; (15) our belief that our existing liquidity and capital resources are sufficient to fund our operations for at least the next twelve months; (16) our expectation that interest income will increase in fiscal 2005; (17) the expected impact of recent accounting pronouncements on our financial condition and results of operations; (18) our belief that our forward currency contracts will not subject us to undue risk; (19) our expectation regarding estimated future deferred stock compensation amortization expenses; (20) the possibility that we may be obligated for additional lease payments to be payable through November 2010 in the event that our vacated facilities are not subleased; (21) our expectation that there will be a further decline in the price per petabyte; (22) our estimates of future intangibles and stock compensation amortization expense relating to the Spinnaker acquisition; (23) our expectation that service margins will improve; (24) our estimates regarding future capitalized patents amortization expenses; (25) our expectation that we will continuously support current and future product development and enhancement efforts and incur corresponding charges; (26) our intention to continuously broaden our existing product offerings and introduce new products; (27) our belief that our research and development expenses will increase in absolute dollars for fiscal 2005; (28) our intention to resell ContentReporter software through a licensing arrangement; and (29) our expectations regarding our contractual cash obligations and other commercial commitments for fiscal years 2005 through 2009 and thereafter, which we anticipate will equal no more than $75.4 million in the aggregate are inherently uncertain as they are based on management’s current expectations and assumptions concerning future events, and they are subject to numerous known and unknown risks and uncertainties. Therefore, our actual results may differ materially from the forward-looking statements contained herein. Factors that could cause actual results to differ materially from those described herein include, but are not limited to: (1) the amount of orders received in future periods; (2) our ability to ship our products in a timely manner; (3) our ability to achieve anticipated pricing, cost and gross margin levels; (4) our ability to successfully introduce new products; (5) our ability to achieve and capitalize on changes in market demand; (6) our ability to identify and respond to significant market trends and emerging standards; (7) our ability to realize our financial objectives through increased investment in people and programs; (8) acceptance of, and

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Overview

      Network Appliance, Inc. (“NetApp”), provides enterprise network storage and data management solutions. NetApp® network storage solutions and service offerings provide data-intensive enterprises with consolidated storage, improved data center operations, economical business continuance, and efficient remote data access. Network Appliance’s success to date has been in delivering highly cost-effective network storage solutions that reduce the complexity associated with conventional storage solutions. Our goal is to provide products that set the standard for simplicity and ease of operation, with what we believe to be one of the lowest total costs of ownership (TCO) and highest returns on investment (ROI) in the industry. Network Appliance^TM solutions are the data management and storage foundation for leading enterprises, government agencies, and universities worldwide.

      Network Appliance was founded in 1992 with the goal of simplifying data access by creating the world’s first network storage appliance. The first system was shipped in 1993. Today Network Appliance is a multinational corporation with over 2,800 employees and an installed base of products in over 100 countries.

      Network Appliance focuses on “simplifying the complex.” This philosophy drives the entire company, from product design and system operation through support processes. This results in significant customer advantages, including:

	•	Lower total cost of ownership, in part because system administrators can more efficiently manage much greater amounts of information, and also because recovery times are significantly reduced in the event of a disaster or data corruption.
	•	Business agility, by improving our customers’ ability to react quickly to changes via rapid deployment or reconfiguration of storage assets.
	•	Improved information availability, due to increased reliability.
	•	Improved application performance, enabling customers to advance their time-to-market goals and create new revenue-generating opportunities.
	•	Business continuance via online rapid restore and disaster recovery deployments.
	•	Satisfying customers’ growing regulatory compliance requirements with our comprehensive software and solutions.

Customer Base

      Our diversified customer base spans a number of large vertical markets. Examples include:

	•	Energy. Customers in the energy market have traditionally deployed our products to support their exploration activities, where the simplicity of the appliance architecture and the ability to support massive amounts of data are critical. Our solutions help enable energy companies to meet their workflow optimization objectives, improve quality, reduce cycle times, and lower costs.
	•	Federal government. The United States (“U.S.”) federal government is one of the largest information technology (“IT”) consumers in the world, and Network Appliance Federal Systems, Inc., provides solutions for many data-intensive activities, including intelligence gathering, analysis, and civilian and military operations.

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	•	Financial services. New data-processing methodologies, shorter time frames for settlement transactions, and new demands for better knowledge management are requiring financial services firms to improve their data storage infrastructures. Network Appliance solutions for enterprise storage enable these financial institutions to effectively manage large amounts of data in a high-speed distributed infrastructure, enabling customers to leverage their existing technology investments and derive maximum value from their time-sensitive information.
	•	High technology. Global technology enterprises, including semiconductor, systems, and software companies, are keenly focused on reducing infrastructure cost and improving time-to-market. Network Appliance solutions enable high-technology firms to achieve these goals by reducing total cost of ownership and providing highly reliable systems and rapid access to corporate information assets.
	•	Internet. Internet-focused businesses place considerable and often unpredictable demands on transaction-intensive, database-driven environments such as electronic mail (e-mail), World Wide Web (WWW), and electronic commerce (e-commerce). In a marketplace where retaining customer loyalty is paramount, Internet-focused businesses must have high performance and readily available data to ensure that their customers do not seek alternative providers. Scalable distributed architectures based on Network Appliance’s products improve data availability, scalability, and performance, while reducing the total cost of ownership.
	•	Life sciences. Pharmaceutical, bioresearch, genomic research, and care providers are focused on developing vital new drugs, improving quality of patient care, and increasing their returns on investment. Network Appliance solutions enable fast access, integration, and sharing of massive amounts of exponentially growing scientific and medical imaging data, reduced time-to-market, and improvements in operational efficiency.
	•	Major manufacturing. Global manufacturing companies face intense competitive pressure to develop attractive new products, improve time-to-market, and optimize profitability. Network Appliance solutions enable these companies to simplify the management overhead associated with storing and protecting large amounts of ERP, engineering, and manufacturing product data, while ensuring that information can be easily and efficiently distributed to manufacturing and distribution sites around the world.
	•	Telecommunications. Service providers in the telecommunications industry are faced with deregulation, globalization, increased competition, and often a substantial debt burden. As a result, they must control infrastructure costs while maintaining or improving services to existing customers and at the same time identifying and developing compelling new revenue streams in order to grow their business. Network Appliance’s products and solutions allow these providers to quickly and cost-effectively build the network storage infrastructure and content delivery networks required by the global telecommunications industry.

Customer Challenges

      Network Appliance enterprise network storage solutions directly address the major information technology challenges that enterprises face — consolidating rapidly growing quantities of storage, reducing costs associated with data center operations, ensuring business continuance, and managing data throughout the globally distributed enterprise.

	•	Storage consolidation. Managing the explosive growth of data is one of the greatest challenges enterprises face today. Network Appliance gives enterprises the scalable solutions they need to consolidate storage from hundreds or thousands of servers and manage storage efficiently in a mixed server environment.
	•	Data center operations. More than just applications and hardware, the data center is the nerve center of an organization, controlling the flow of information throughout the enterprise. Many of the costs that drive up the total cost of information technology (IT) ownership are associated with data center operations, and include tasks such as data backup and recovery, hardware and software maintenance,

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		performance management, and resource allocation. Our simplified appliance architecture automates or eliminates many of these administrative tasks, and delivers simple, centrally managed, and flexible data storage that leverages and increases the performance of existing IT infrastructures.
	•	Business continuance. Many enterprises are increasingly focused on disaster preparedness and recovery and must avoid costly downtime in the event of a major disaster or localized disruption. Minutes of downtime are costly, and hours of downtime can be catastrophic. Working in tandem with the existing network infrastructure (both Fibre Channel and Ethernet), our storage appliances and data management software enable customers to implement disaster recovery and data mirroring plans quickly and effectively, while minimizing incremental telecommunications and administration costs.
	•	Distributed enterprise. As enterprises grow, it becomes increasingly difficult to provide timely information to remote locations and branch offices, jeopardizing their productivity. NetApp products accelerate information access and application performance while reducing bandwidth costs, and also reduce the cost and complexity associated with managing the data in these distributed offices. Our solutions enable enterprises to quickly replicate and relay information to and from one or many locations, fully protecting data in remote offices and locations.
	•	Regulatory Compliance. Regulatory compliance is a growing concern for every industry. Regulations such as Sarbanes-Oxley, Patriot Act, Gramm-Leach-Bliley affect all U.S. based companies. Furthermore, industry specific businesses are affected by such regulatory acts such as Rule 17(a)(4) of the Securities and Exchange Act of 1934, as amended, which relates to preservation of certain records by certain exchange members as well as brokers and dealers, as well as Health Insurance Portability and Accountability Act (“HIPAA”) and several government defense requirements. NetApp offers compliance solutions designed to address such regulations and the need for data permanence, security, and confidentiality while reducing business risks and improving information access.

A Solution-Based Approach

      To meet these customer challenges, Network Appliance offers a growing number of integrated solutions that address the specific data management hurdles faced by our enterprise customers. These turnkey solutions, which include hardware, software, service, and financing components, enable our customers to simplify their storage management, leverage their existing infrastructure, and increase their return on investment. The solutions that have received the greatest level of interest to date include:

	•	Storage Consolidation: File sharing and messaging applications are critical to successful enterprise operations. Network Appliance offers highly available, scalable, and cost-effective storage consolidation solutions that incorporate the NetApp unified storage platform and the feature-rich functionality of data and resource management software to improve storage utilization. By freeing up valuable infrastructure and staff resources, Network Appliance storage consolidation solutions improve enterprise productivity, performance, and profitability.
	•	Information Lifecycle Management (“ILM”): The Network Appliance open approach to ILM enables the deployment a best-of-breed solution that matches unique business requirements for information management and regulatory compliance. Whether customers are looking at data protection, accessibility, security, or compliance, NetApp enables customers to effectively align storage resources for optimum performance and preservation while maintaining costs despite growing needs for online data. With a common architecture and open approach, NetApp ILM solutions simplify their environment and deliver the ultimate in flexibility.
	•	Data Protection: Network Appliance data protection solutions offer the ultimate data security in a heterogeneous environment, simplifying complex backup and recovery tasks; reducing data storage requirements; ensuring rapid, complete disaster recovery; and leveraging existing data protection investments. Working with our customers to deliver a successful data protection strategy, NetApp not only helps ensure that mission-critical data is backed up, replicated, and accessible in this complex

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		environment, but also enables organizations to completely retrieve data after such unplanned events as user error, system failure, and operational outages.
	•	Regulatory Compliance: The Network Appliance regulatory compliance solution is designed to address growing regulatory concerns for data permanence, security, and confidentiality while reducing business risks and improving information access. In conjunction with partners, NetApp is delivering comprehensive compliance solutions for customers across many vertical markets and geographies. The results not only help satisfy regulatory compliance requirements but also provide customers with unmatched flexibility and immediate access to information while reducing costs. The NetApp solution incorporates specialized software that delivers write once, read many (“WORM”) data permanence capabilities and that stores critical business records in a nonerasable, nonrewritable format across NetApp systems, best-of-breed partner solutions, and services.
	•	Grid Computing: As the trend toward consolidating storage and serving a variety of applications from a unified storage pool continues, we will continue to provide solutions that will allow customers to more easily and cost efficiently provision, access, manage, and share data across their entire compute grid and user base. The combination of NetApp unified storage and data management solutions with advanced distributed storage technologies acquired from Spinnaker will further our strategy to deliver Storage Grid solutions as the foundation for data infrastructures of the future. In the near term, the Spinnaker acquisition will allow us to target markets with customers who are already deploying such grid like architecture with large-scale Linux® farms for high performance computing applications in industry verticals like Energy, Entertainment and Federal Government. We expect the NetApp Storage Grid to become the storage architecture of choice for enterprises looking to run their IT infrastructures as a utility.
	•	Internet access and security: The Internet access and security solution merges proxy caching and storage technologies to improve the secure access and management of information and eliminate obstacles created by geography, complexity, and resource limitations. In accomplishing this, NetApp reduces costs, increases collaboration, and increases productivity.

Total Customer Experience

      No matter what the solution, NetApp strives to simplify whenever possible, utilizing open standards and driving industry collaboration, partnering with other industry leaders, and providing world-class global service and support.

	•	Simplicity. The NetApp appliance architecture allows enterprises to reduce management overhead, decrease deployment times, and eliminate the downtime typically associated with general-purpose architectures. Network Appliance plans to continue to expand on the appliance architecture in future product designs and service offerings.
	•	Open standards and industry collaboration. Network Appliance participates in and leads many industry initiatives and organizations, such as the Storage Networking Industry Association (“SNIA”), the Enterprise Grid Alliance (“EGA”), that have defined standards that are widely deployed today. Standards that Network Appliance has helped advance include the Network File System (“NFS”) protocol for file access in UNIX® and Linux® environments; the Common Internet File System (“CIFS”) protocol for file access in Windows® environments; the Network Data Management Protocol (“NDMP”) for simplifying backup of networked storage; the Internet Content Adaptation Protocol (“ICAP”) for content adaptation in Web environments; the Direct Access File System (“DAFS”) protocol for high-performance, high-throughput access to data; and the Internet Small Computer System Interface (“iSCSI”) protocol for building block-based storage area networks using widely deployed Ethernet infrastructures. We plan to continue to participate in driving emerging standards, including NFS version 4 and 10 Gigabit Ethernet.
	•	Business application integration and partnerships. Network Appliance’s goal is to deliver complete network storage solutions to customers. Our partners are vital to our success in this area, and we have

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		significant partner relationships with database and business application companies including Dassault Systèmes, FileNet, several solutions from IBM including DB2 and Lotus, Interwoven, IXOS/ OpenText, Landmark Graphics, Microsoft, Openwave, Oracle, Rational, SAP, SAS, Sybase, UGS Corp, and Vignette. These application partnerships enhance our ability to reduce implementation times, increase application availability, and provide the highest level of solution support to customers. Technology and infrastructure solution partners enable seamless integration into customers’ existing environments, resulting in lower costs and more rapid deployment. Our infrastructure partner list includes ADIC, Atempo, Bakbone, Brocade, Cisco, Commvault, Computer Associates, Egenera, Fujitsu Siemens Computers, Hitachi Data Systems, IBM Tivoli, KVS, Legato, McData, Novell/ SuSE, NuView, Quantum/ ATL, Red Hat, RLX Technologies, Spectra Logic, StorageTek, Symantec, Syncsort, and VERITAS.
	•	Global service and support. Network Appliance’s increasing number of enterprise customers requires a global, integrated service-and-support model. These requirements have been met by expanding efforts in professional services and support offerings, as well as by continuing to develop strategic partnerships. Our partnerships with service providers such as Accenture, Computer Sciences Corporation, Electronic Data Systems (“EDS”), Fujitsu Siemens Corporation and IBM Global Services allow us to better serve customers by broadening service offerings, as well as leveraging existing service and support relationships that customers may already have in place.
	•	Network Appliance Financial Solutions (“NAFS”), the customer finance group for Network Appliance Inc., offers a variety of standard and tailored financial products to help our customers acquire Network Appliance solutions. NAFS offers financial programs in the U.S., Canada, Europe, and Asia-Pacific. Our financial product offerings are designed to help enhance our customers’ ROI and reduce their TCO by providing competitive rates; matching budgetary or cash flow requirements by spreading the payments out over time; providing technology refresh options within the initial term; and financing the entire solution including hardware, software, and services.

Classes of Data

      NetApp products and solutions are based on the premise that not all data is created equal. Enterprise customers face a significant challenge in designing networked storage infrastructures that balance the availability requirements of their applications and associated data with the cost of the storage solution. Storing all data on an expensive, monolithic, mainframe-class array is no longer acceptable and customers want to carefully evaluate the value of their information. As a result, data is being classified by availability and performance requirements in relation to cost.

	•	Business-critical data. Business-critical applications, including trading-floor applications and ERP systems, require the highest levels of availability and reliability, have more dedicated management resources, and exhibit the least amount of cost sensitivity. If this data is unavailable, the business is typically not generating revenue and may incur other financial penalties.
	•	Business operations data. This category includes data used by externally visible business operations applications, including e-mail, customer support applications, and external Web sites. If this data is unavailable, it may be apparent to customers and prospects, impacting revenue and reflecting poorly on the organization. As such, this data has higher reliability and availability requirements, and typically requires more significant storage infrastructure and data management software investments.
	•	Back office data. This class of data is accessed by internal employees, and while the availability of the data is not important to customers outside the business, it can have a big impact on the users of the data inside the business. Examples of business internal data include corporate intranets, HR systems, and data warehouses used for analytical purposes.
	•	Departmental and remote office data. Departmental and remote-office deployments also require a low-cost solution, but typically need higher levels of availability with low management overhead. Data in this class is typically not used outside the department or remote office.

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	•	Compliance data. These assets represent much of the corporate or personal data related to conducting business, performing research, buying and selling securities, or other mission-critical, fiduciary, or private activities. This information, like any hard asset, needs to be protected, monitored, maintained, exchanged, and secured.
	•	Reference data. Types of reference data include e-mail archives; bank, brokerage, and billing statements; medical images and records; mechanical computer aided design (“MCAD”) drawings; integrated chip designs; and seismic and satellite data. Customers require fast data access at costs comparable to much slower high-end tape or optical libraries, with minimal ongoing management costs.
	•	Archive data. Enterprises require a low-cost storage solution for archive data and backups, which have historically been stored on magnetic tape. Many customers are now augmenting magnetic tape and storing these classes of data on more flexible disk-based systems which reduces backup windows and enables rapid recovery in the event of a disaster.

      Network Appliance solutions meet the needs of archive, reference, departmental/remote office, business internal, business operations, and business critical data with a common product architecture and data management methodology, enabling customers to easily deploy and manage all their networked storage infrastructure in the same way.

System Products

      NetApp products consist of fabric-attached storage (“FAS”) appliances, also known as filers, NearStore® systems, NetCache® content delivery appliances, the Data ONTAP^TM operating system, our WAFL file management system, data management and content delivery software, and NetApp Global Services. Our configured appliances range in price from $4,000 to more than $1,000,000.

      The NetApp solution runs on a common architecture across all NetApp systems, allowing for optimal scalability and increased flexibility. Customers can protect their existing investments and consolidate both compliance and non-compliance-related data on a single platform, helping to simplify compliance management and reduce storage costs. Through open standards, NetApp helps ensure rapid application deployment and smooth integration into its customers’ existing infrastructure. Our data management features help provide you simple management, improved data protection, and reduced operational costs.

      All NetApp systems come packaged in rack-mountable enclosures that can be installed in a customer’s existing server racks or can be factory-installed and configured in cabinets. Our appliances are based primarily on commodity hardware, including Intel® Pentium® processors, an advanced implementation of the industry-standard PCI bus architecture, standard Ethernet adapters, and either Fibre Channel-Arbitrated Loop (“FC-AL”), Advanced Technology Attachment (“ATA”), or Small Computer System Interface (“SCSI”) disk interconnects.

      NetApp filers are scalable, highly available, unified networked storage systems for data storage and simplifying data management. They are specifically designed for highly scalable, network-centric IT system architectures, and support both network-attached storage (“NAS”) and storage-attached networks (“SAN”) on a single, unified platform. Our filers are designed for and deliver lower total cost of ownership than alternative competitive systems. Heterogeneous data sharing allows our systems to deliver simultaneous data access to Linux, UNIX, Windows, and Web-based servers and clients, dramatically lowering the total cost of ownership and management complexity versus homogeneous storage systems. Filers are available in either single-node configurations or fully redundant, active/active cluster configurations that provide high data availability for business-critical environments.

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      Current filer products include:

	•	NetApp FAS 980c/ FAS980 enterprise servers. Introduced during fiscal year 2004 and built for the most demanding customers, the FAS980c is our highest-performance filer. The FAS980c continues the NetApp tradition of providing industry-leading performance in a simple, reliable, flexible, and manageable system. The FAS980c is designed to accommodate thousands of independent users and large, high-bandwidth applications. With the capability of managing up to 64 TB of data in one system and 8TB in one file system, the FAS980c can meet the storage demands of virtually any enterprise — including iSCSI or FC SAN and NAS configurations. The NetApp clustered filer architecture integrates multiple processors in an active/active clustered failover configuration to provide high availability and scalable performance to multiple networks.
	•	NetApp FAS960c/ FAS960 enterprise server. Similar to the FAS 980c/980, the FAS960c and 960c are systems that are deployed for demanding SAN or NAS applications but require less capacity. Available with up to 48 TB of storage, these systems are deployed in a broad range of enterprise applications, including Customer Relationship Management (“CRM”), Enterprise Resource Planning (“ERP”), Decision Support Solutions (“DSS”), massive home directory consolidation, and Web serving.
	•	NetApp FAS940c/ FAS940 enterprise server. The flexibility and performance capabilities of the FAS940c bring FAS900 series features to a broad range of enterprise applications, including Customer Relationship Management (“CRM”), Enterprise Resource Planning (“ERP”), Decision Support Solutions (“DSS”), massive home directory consolidation, and Web serving.
	•	NetApp FAS920c/ FAS920 enterprise server. The newest mid-range offering in the FAS 9xx family is the FAS 920c/920 introduced early in fiscal year 2005. Available with up to 12TB of storage, the 920 series continues our unified storage leadership but at a lower entry price point and capacity. Still deployed on a broad range of mission-critical enterprise applications, these systems leverage the NetApp solution’s ability to easily scale to meet changing customer requirements.
	•	NetApp F825c/ F825 enterprise servers. The balance of capacity and performance with flexible I/ O configuration enables the NetApp F825c/ F825 to power a broad range of large- scale applications. Currently deployed in the largest service provider networks and data-intensive environments, including those running database/ ERP and other enterprise-level applications, the F825 servers are proven high-performance workhorses.
	•	NetApp FAS270 filer. The FAS270 is a midrange system that offers an entry-level Fibre Channel SAN solution while providing strong price/performance for NAS and iSCSI infrastructures. Available with up to 6 TB of storage, the FAS 270 offers enhanced price/performance for mid range SAN or NAS applications
	•	NetApp FAS250 filer. The NetApp FAS250 is an entry-level enterprise filer supporting capacities up to 2TB in a compact form factor. The FAS250 is completely software compatible with all other NetApp products and uses the same storage shelves and Fibre Channel disks currently available for the F800 and FAS900 series filers. The FAS250 provides customers with an attractive entry-level price and a simple upgrade path to higher-capacity, higher-performance filers.

      The Network Appliance gFiler^TM is an innovative gateway storage solution that provides unified SAN and NAS access to data stored in Fibre Channel SAN storage arrays from other storage vendors. The gFiler enables superior consolidation and storage management in data center storage deployment for an expanded set of business solutions. Like all NetApp storage appliances, the gFiler is based on the Data ONTAP microkernel operating system, which supports multiprotocol data access services and advanced data management capabilities for consolidating, protecting, and recovering mission-critical data for enterprise applications and users.

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      Current gateway filer products include:

	•	NetApp GF960/c gateway. Provides industry-leading performance to thousands of independent users and high-bandwidth applications. Scales to 48TB of managed capacity when configured for simultaneous active/active data access with secure failover across two independent systems.
	•	NetApp GF940/c gateway. Provides flexibility and industry-leading performance across a broad range of enterprise applications. Scales to 24TB of managed capacity when configured for simultaneous active/active data access with secure failover across two independent systems.
	•	NetApp GF920/c gateway. Provides flexibility and industry-leading price/performance across a broad range of enterprise applications. Scales to 12TB of managed capacity when configured for simultaneous active/active data access with secure failover across two independent systems.
	•	NetApp GF270c gateway. Provides an entry-level, integrated highly available solution for small to mid-size workloads. Scales to 6TB of managed capacity with simultaneous active/active data access with secure failover across two independent, integrated systems.

The gFiler series supports multiple enterprise storage systems including the Hitachi Data Systems Freedom Storage^TM systems, the Hitachi Limited SANRISE storage systems, and the IBM TotalStorage Enterprise Storage Server series. The gFiler series for Hitachi Freedom Storage is available exclusively through Hitachi Data Systems and its authorized resellers.

      NetApp NearStore products are designed for improving data backup and recovery architectures, storing reference and regulated data, and archiving infrequently accessed files. NearStore systems back up and restore data with speed, consistency, ease of use, and scalability, particularly compared to tape-based backup/restore solutions. The product complements and improves upon existing tape backup processes by inserting economical and simple-to-use disk-based storage between application storage and tape libraries, resulting in an efficient two-stage backup configuration. Almost any type of primary storage can be backed up to NearStore systems, including UNIX, Linux, and Windows servers with direct-attached or SAN-attached storage from all other storage vendors, desktop and notebook computers, and NetApp filers. NearStore can also be used as a replication target within a data center, or for replicating data from remotely distributed offices or branches to a central location in a fully heterogeneous, platform-independent architecture.

      NearStore systems are also ideal for consolidating nearline data resources, including reference and archive data into a single storage platform. This platform can be located and managed centrally, thus reducing costs associated with data center operations.

      With the advent of Rule 17a-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and HIPAA as well as several governmental defense requirements, NearStore, in conjunction with NetApp SnapLock^TM software, has become part of an open access data-retention solution targeted at regulated data industries, such as financial services, healthcare, pharmaceuticals, and government.

      Our current NearStore product, the R200, is available in system capacities scaling from 8TB to 96TB, and provides full fabric-attached storage connectivity via FCP, iSCSI, and NAS protocols.

      The NetCache product line is a scalable suite of Web delivery and security appliances designed to solve complex problems faced by enterprises and service providers. These appliances are deployed across the entire network, from the primary data center to remote points of presence (POPs) and local offices worldwide. They improve Internet gateway security and deliver web content and applications throughout a customer’s entire network. NetCache appliances address three major areas of customer challenge:

	•	Internet security. NetCache appliances form the foundation of the NetApp Internet Access and security (“IAS”) solution, which enables many Internet security capabilities, including proxy, caching,

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		access control, content filtering, Web antivirus, SSL scanning, IM and P2P blocking, antispam, and reporting.
	•	Web content and application acceleration. NetCache appliances reduce delays, bandwidth usage, and server load to improve delivery of web content and web-based applications such as ERP and CRM systems.
	•	Video delivery. NetCache appliances improve delivery quality of online training, executive video broadcasts, and large-scale video-on-demand services.

      Current NetCache hardware models include:

	•	NetCache C1200. Designed for remote offices and service providers’ POPs, the C1200 combines space-sensitive design, reliability, and modular configurations at an attractive price point. The C1200 does not sacrifice reliability for low cost—it includes features like RAID and SCSI disk drives.
	•	NetCache C2100. This midrange model optimizes price/performance by supporting a wide range of capacity and reliability features. Reliability and availability of mission-critical data are ensured with features such as RAID, redundant hardware, and hot-swappable drives.
	•	NetCache C6200. This high-end model delivers the ultimate performance and reliability for the data center and other high-bandwidth locations. Large content libraries—up to 2TB of storage—can be reliably stored and protected with RAID support.

Software Products

      Network Appliance sells appliance- and server-based software that simplifies storage administration and increases data availability. All NetApp appliances are configured with the Data ONTAP microkernel as part of the base system, which includes the patented WAFL® (Write Anywhere File Layout) file system. Data ONTAP supports protocols for both NAS and SAN architectures, as well as several new data management, data replication and data protection software products. Data ONTAP software offers a unique set of features to ensure mission-critical availability levels, while lowering the total cost of ownership and the complexity typically associated with enterprise storage management. Snapshot^TM technology, included as part of the base system, enables online backups and provides rapid access to previous versions of data without requiring complete separate copies. Snapshot copies also eliminate the need to recover data from a tape archive in the event of a disaster or user error.

      Network Appliance develops software support for a number of industry-standard protocols. The base systems include one protocol, and additional protocols may be added at any time for an additional license fee. Protocols available for the filer—including gFiler—and NearStore families include:

	•	Common Internet File System (CIFS). CIFS is an industry-standard network file-sharing protocol used in Microsoft® Windows environments.
	•	Fibre Channel Protocol (FCP). FCP is the standard serial SCSI command protocol used in Fibre Channel SAN networks. FCP is a heterogeneous protocol supported by all standard Linux, UNIX, and Windows operating systems.
	•	File Transfer Protocol (FTP). FTP is an industry standard used to exchange files between computers. FTP comes with the base system at no additional charge.
	•	HyperText Transfer Protocol (HTTP). HTTP is the de facto standard for serving documents to Internet browsers. Having the HTTP server embedded inside the Data ONTAP operating system offers a significant performance advantage over traditional Web servers. In addition, the same set of files can be served by the filer via NFS, CIFS, or HTTP, eliminating the need to replicate data and servers to serve different users.

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	•	iSCSI protocol. iSCSI, a new protocol defined by the Internet Engineering Task Force, offers the consolidation, scalability, and management advantages of a storage area network without the unfamiliarity, complexity, and expense of Fibre Channel. iSCSI is an Ethernet-based protocol.
	•	Network File System (NFS). NFS is an industry-standard client/server protocol for sharing files and directories over a network in Linux and UNIX environments.

      Network Appliance also offers a comprehensive set of software products that provide specialized functionality to solve a variety of business problems. These add-on software features and products are supported on our following product lines:

*	SnapLock Enterprise is supported.

      Data management software for filers and NearStore:

	•	Clustered failover software. Clustered failover software for filers ensures high data availability for business-critical environments by eliminating any single point of failure through a fully redundant, active/active network storage cluster configuration.
	•	MetroCluster. MetroCluster is a highly available business continuance solution ideal for campus and metropolitan area networks. MetroCluster enables customers to quickly and easily resume mission-critical operation at a remote site with no data loss and minimal downtime.
	•	MultiStore. Many enterprises have thousands of Windows and UNIX file servers distributed throughout their networks. These servers not only represent an enormous hardware investment they also create huge, ongoing administration costs. NetApp MultiStore reduces this major expense and complexity by enabling a single physical filer to appear as multiple virtual filers. NetApp MultiStore software enables customers to quickly and seamlessly consolidate a large number of servers onto a single filer.
	•	SnapLock. SnapLock is designed to meet the requirements of data permanence required by various government regulations — most notably Rule 17a-4 under the Exchange Act for financial services broker-dealers. SnapLock provides WORM (write once, read many) attributes such as

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		nonerasability and nonrewritability that prevent data, once it is stored on NearStore, from ever being altered or deleted.
	•	SnapMirror. SnapMirror remote mirroring software enables automated asynchronous file system replication between sites. SnapMirror leverages the Data ONTAP Snapshot technology to enable customers to quickly recover from site disasters, easily replicate critical data, and cost-effectively deploy centralized backup architectures.
	•	SnapMover. NetApp SnapMover software is a fast and simple solution for migrating data among NetApp storage systems with no impact on data availability and no disruption to users. SnapMover enables IT to efficiently meet evolving storage and performance requirements while maintaining user productivity.
	•	SnapRestore. SnapRestore allows rapid restoration of a file system to an earlier point in time, typically in only a few seconds. SnapRestore is based on the Data ONTAP Snapshot technology and enables customers to greatly minimize recovery time in the event of data corruption or loss.
	•	SnapVault. SnapVault provides extended and centralized disk-based backup for filers, and for heterogeneous servers with their associated storage, by periodically backing up data to, and maintaining Snapshot copies on, another filer or NearStore system on the network. Storing multiple Snapshot copies on the SnapVault server enables enterprises to keep weeks, months, or years of backups online, improving recovery times in the event of a disaster or data corruption.
	•	SyncMirror. SyncMirror is a synchronous data replication tool for mission-critical applications in a local data center environment. The replicated data is completely up-to-date and provides a higher level of data availability by protecting data against various physical storage component failures.

      Storage management and application integration software for filers and NearStore:

	•	ApplianceWatch. ApplianceWatch software allows IT professionals to centrally manage and administer NetApp appliances using standard management frameworks, including products from HP OpenView and Tivoli.
	•	DataFabric Manager software. DataFabric Manager offers the ability to manage multiple NetApp filer appliances, NearStore systems, and NetCache appliances from a single administrative console, reducing administrative complexity and total cost of ownership. DataFabric Manager 3.0 was introduced during fiscal year 2004.
	•	FilerView. FilerView a Web-based administration tool, allows IT administrators to fully manage filers from remote locations on the network using a Web browser.
	•	SnapDrive SnapDrive is a management software package that enables customers to take full advantage of the simple data management capabilities of the filer appliance in block-based storage environments.
	•	SnapManager. SnapManager software for Microsoft Exchange, Microsoft SQL Server, and Lotus Domino allows customers to perform online backup and rapid recovery of business-critical application data. SnapManager enables application-aware disk-based data recovery, restoring critical application services as quickly as possible in the event of a disaster.
	•	Snapshot. Snapshot technology is included as part of the base system, enables online backups, and provides rapid access to previous versions of data without requiring complete separate copies. Snapshot copies also eliminate the need to recover data from a tape archive in the event of a disaster or user error.
	•	Virtual File ManagerTM (VFM). VFM is a file virtualization solution for managing distributed storage in Windows and multiprotocol environments. VFM provides a global namespace that dramatically simplifies the administration of large file server environments.

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NetCache Appliances

      NetCache Web delivery and security appliances support many applications including proxy, Web caching, content filtering, virus scanning, Web application acceleration, streaming media delivery, content distribution, and usage analysis applications. NetApp technology provides the unique ability to deploy all of these solutions on a single appliance. Our technology advantages provide greater multifunctional capabilities from a single appliance, so networks can be scaled more quickly, with greater manageability.

      The NetCache product line includes support for proxy and caching of many standard Web protocols, including:

	•	Domain Name Service (DNS). DNS caching improves lookups of Web site addresses to improve overall Web access and reduce IP traffic.
	•	File Transfer Protocol (FTP). FTP is an industry standard used to exchange files between computers.
	•	HyperText Transfer Protocol (HTTP). HTTP is the de facto standard for serving documents to Internet browsers. Having the HTTP server embedded inside the Data ONTAP operating system offers a significant performance advantage over traditional Web servers.

      NetCache protocols available for an additional license fee include:

	•	Network News Transfer Protocol (NNTP). NNTP is the de facto standard for online discussions on the Internet. NNTP caching enables Internet service providers (ISPs) to provide a high-quality NetNews service at a fraction of the cost of traditional NetNews servers.
	•	Secure Sockets Layer (SSL): SSL is used to securely transfer encrypted data on the Web. With this feature enabled, NetCache can terminate an SSL connection in order to cache and accelerate HTTPS traffic between clients and Web servers, providing end users with better quality of service (QOS).

      Network Appliance also offers a set of software products that provide specialized functionality to solve a variety of business problems. Additional add-on software features and products for the NetCache family include:

      Content delivery:

	•	Microsoft Windows MediaTM streaming. Fully supports Windows Media features such as live stream splitting; delivery of video-on-demand; and digital rights management, authentication, authorization, and logging.
	•	QuickTimeTM streaming. Supports Apple® QuickTime streaming servers and the Apple QuickTime Player to optimize the delivery of QuickTime content.
	•	RealNetworks® streaming. Supports RealAudioTM and RealVideoTM, and replicates SureStreamTM functionality between RealSystemTM servers and RealPlayer®.

      Internet access and security:

	•	Internet content filtering. On-box Internet content filtering provided via Secure Computing SmartFilter® and Webwasher® DynaBLocatorTM. Off-box content filtering provided via Websense Enterprise® and Webwasher® CSM Suite.
	•	Virus scanning. The NetCache family supports ICAP-enabled virus scanning by leading antivirus engines. Webwasher® CSM Suite is available from NetApp, while others, including Trend MicroTM InterScanTM Web Security Suite and Symantec AntiVirusTM Scan Engine, are available from their respective manufacturers.

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	•	Webwasher® ContentReporter. Webwasher ContentReporter provides a library of rich, customizable reports based on built-in cache, streaming media, e-mail activity, Internet access, and content filtering queries for monitoring, managing and securing Internet content and network activity.

      Systems setup and administration:

	•	ApplianceWatch. ApplianceWatch software allows IT professionals to centrally manage and administer NetApp appliances using standard management frameworks, including products from HP OpenView and Tivoli.
	•	DataFabric Manager (DFM) software. DataFabric Manager offers the ability to manage multiple NetApp filer appliances, NearStore systems, and NetCache appliances from a single administrative console, reducing administrative complexity and total cost of ownership. DataFabric Manager 3.0 was introduced during fiscal year 2004.
	•	DataFabric Manager distribution module. As an add-on to DFM, the DFM distribution module enables administrators to prepopulate data onto the NetCache appliance based on powerful administrative policy options.
	•	Global Request Manager (GRM): GRM provides a mechanism to redirect Web requests to the NetCache appliance with the greatest availability and closest proximity to the end user which simplifies the deployment of a content delivery network and lowers the total cost of ownership.
	•	SecureAdmin.TM SecureAdmin encrypts administrative sessions between NetCache and the administration console, delivering maximum security for online administration in an untrusted environment.

      Customers may purchase an annual software subscription upgrade that provides online access to all software and firmware upgrades and updates.

Netapp Global Services

      Network Appliance offers comprehensive, global, enterprise-wide support and consulting solutions. Some enterprise customers require a comprehensive, enterprise-wide support solution, while others operate with complete self-sufficiency. Our flexible support and consulting service programs help our customers maximize data availability and maintain a low total cost of ownership.

      Network Appliance’s commitment to customer service and satisfaction is reflected in our Global Support Center (“GSC”) operations available from five locations: Sunnyvale, California; Raleigh, North Carolina; Hoofddorp, Netherlands; Bangalore, India; and Tokyo, Japan. Our “follow the sun” strategy provides around-the-clock support regardless of where a customer is located. All five Global Support Centers have received the Support Center Practices (“SCP”) certification, which is an internationally recognized standard created by the Service & Support Professionals Association (“SSPA”) and a consortium of IT companies to create a recognized quality certification for support centers.

      Our proactive service options provide comprehensive enterprise-wide support and ensure optimal system configuration and performance:

	•	Global Advisor and Global Advisor Plus. Network Appliance will review GSC cases and remotely monitor systems for trends or issues beyond the base AutoSupport level. With Global Advisor Plus, we provide customers with direct access to back-line engineers.
	•	System Availability Management (“SAM”) and System Availability Management Plus (“SAM+”). Network Appliance performs regular site inspections and system availability reviews. With System Availability Management Plus, customers also receive on-site, 24x7 response from our Professional Services engineers.

      Network Appliance Consulting Services o