SecProbe.io

Room 4561
February 7, 2007

Steven J. Gomo
Chief Financial Officer
Network Appliance, Inc.
495 East Java Drive
Sunnyvale, CA 94089

Re:  Network Appliance, Inc.
Form 10-K for the Fiscal Year Ended April 30, 2006
Form 10-K for the Fiscal Year Ended April 30, 2005
Form 10-Q for the Quarterly Period Ended July 28, 2006
Form 10-Q for the Quarterly Period Ended October 27, 2006
File No. 000-27130

Dear Mr. Gomo:

We have reviewed the above referenced  filings and your response letter dated
December 21, 2006 and have the following comm ents.  Please note that we have limited
our review to the matters addressed in the co mments below.  We may ask you to provide us
with supplemental information so we may be tter understand your disclosures.  Please be
as detailed as necessary in your explanations .  After reviewing this information, we may
raise additional comments.

Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or on any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for the Fiscal Year Ended April 30, 2006

Critical Accounting Estimates and Polices, page 36

1. Your response to prior comment number 1 indicates that you will consider further discussion of estimates and/or judgmen ts that you apply when determining
whether you have established VSOE of fa ir value for the undelivered elements in
your arrangements.  We note that you have  not included any additional disclosure
about such estimates and/or judgments in  your Form 10-Q for the quarterly period
ended October 27, 2006 (which was filed on December 6, 2006).  However, your

Steven J. Gomo
Network Appliance, Inc.
February 7, 2007 Page 2
response to comment number 2 from your letter dated August 31, 2006 stated that
you apply material estimates and/or judgments in dete rmining whether VSOE can
be established for the undelivered elemen ts in your arrangements.  Based on your
response to comment number 2 from your letter dated December 21, 2006, it
appears that material estimates and judgme nts are involved in your  analysis of the
concentration of pricing of separate sales in determining whether VSOE of fair
value of your undelivered elements exists.  Please confirm that you will discuss in
future filings what appear to be these material estimates and judgments and the assumptions you apply when determining that you have established VSOE of fair value for the undelivered elements in your arrangements.

Note 2.  Significant Accounting Policies

Revenue Recognition and Allowance, page 65

2. We note your response to prior comment number 2 with respect to your policy for establishing fair value of the undelivered elements in your arrangements and are in
the process of reviewing your response.  We further note the information being
analyzed in your response relates to your population of separate sales (i.e.
renewals) in fiscal year 2005 as originally provided in your May 31, 2006 letter.  Please update the analysis provided in the Appendix to your May 31, 2006 letter
for your separate sales in fiscal year 2006.  That is, please provi de the fiscal year
2006 information demonstrating that you have  established VSOE of the fair value
of the software PCS and bundled premiu m hardware maintenance/PCS elements
and objective and reliable evidence of the fair value of the bundled storage
reviews/premium hardware maintenance/ PCS for both your top enterprise accounts
and your non-top enterprise  accounts.

3. Your response to prior comment number 3 st ates that “the storage review services
represent an element of the combined un it of accounting that is not insignificant
based on the estimated relative fair value of approximately 20% of the fair value of the undelivered bundled arrangement.”  We  further note your reference to the
interpretive guidance of th e Miller Revenue Recognition guidance cited in your
August 31, 2006 letter.  Please clarify how you have considered other interpretive guidance when determining that the guidance in the Miller Revenue Recognition guide is the appropriate inte rpretive guidance to apply to your arrangements based
on your facts and circumstances .  In addition tell us how the application of other
interpretive guidance would im pact the allocation and recognition of the elements
in this bundled unit of accounting.  Tell us how you considered an interpretation
that suggests revenue recognition for the combined unit of accounting based on the
revenue recognition guidance otherwise appl icable to the predominate deliverable
in the unit of accounting.  Please clarify how the application of this interpretation would impact the allocati on and recognition of the el ements in your bundled unit
of accounting.

Steven J. Gomo
Network Appliance, Inc.
February 7, 2007 Page 3
4. We note your response to prior comment 4 with respect to you r analysis supporting
your conclusion that the storage review se rvices are not software-related.  Please
further clarify why you believe that the st orage review services are not software-
related services as contemplated by paragraph 9 of SOP 97-2.  In this respect, your response states that you “uti lize a separate, NetAPP-propr ietary, software program
to assist in performing the monitoring and data collection activities which are part
of [y]our storage review se rvices.”  While the software program is not sold, you
indicate that you install elements of the software on your customer’s hardware for
a term of use which appears to be indicativ e of a software lease within the scope of
SOP 97-2, paragraph 2.  Absent persuasive evidence to the contrary we believe the
storage review services are within the scope of SOP 97-2.  In this regard tell us
why the storage optimization review has or has not met each of the more-than-incidental software indicators in footnote 2 to pa ragraph 2 of SOP 97-2.  Please
also address the following in your respons e regarding the storage review services:

• Explain how the software delivered to  assist in the monitoring and data
collection activities interf aces and interacts with your proprietary storage
and data management software sold to customers in your sales arrangements.
• Provide a representative example of the marketing effort describing this
service when sold in bundled arrangements.
• Describe the software data or in formation you provide to customers
acquiring the services.
• Describe the nature of any customer  provided performance specifications
and how they relate to software featur es both of the storage review service
and the customer’s software.
• Tell us if your customers consider the software interactive features of the
service’s software program in selecting the storage optimization review
services.
• Tell us if upgrades or enhancements to  the software are offered with the
storage review services arrangements.

5. If you still conclude that th e storage review services are not a software element
pursuant to SOP 97-2, please provide a furt her analysis supporting your conclusion
that the software is not essential to the functionality of the storage review services
pursuant to EITF 03-5.  We note your response to prior comment number 4,
whereby you acknowledge that in all cases  where storage review services are
performed, the customer has purchased  your proprietary storage and data
management software.  Clarify whether th e storage review services would have
substantive functionality to your custom ers without the delivered proprietary
software.

Steven J. Gomo
Network Appliance, Inc.
February 7, 2007 Page 4
6. Your response to prior comment numbers 5 and 6 indicates you are allocating revenue between your software subscriptions and service financial statement captions on a relative fair value method.  We note you apply this method by using
stated list prices as the basis to determine the fair value of the various elements sold at the time of initial product sale.  We further note the overall weighted
average discount used to determine the tota l fair value of the combined units of
accounting are applied against the list pri ce of each element in the combined unit
to determine their relative fair value.  Please clarify why you believe that this
method of determining the relative fair valu e of the service elements is performed
on a systematic and rational basis.  In th is respect, please further clarify why you
believe that the list pric e provides a rational basis fo r determining the underlying
fair value of these services.  Please cl arify how you allocate the overall weighted
average discount to the elements in the unit of accounting.

7. Please clarify why you believe that your application of the relative fair value
method is a more valid method of cla ssifying revenue between your software
subscription and service financial stat ement captions than the residual value
method.  Since you have esta blished VSOE of software PCS, clarify why you do
not apply the residual method to allo cate fair value between your software
subscription and service financial statement captions.

General

8. We are aware of a publicly available February 2006 arti cle that reports you have
signed a distribution agreement with Tech Access for Tech Access to distribute your products to countries including Sudan.  Sudan has been identified by the State Department as a state sponsor of terror ism, and is subject to U.S. economic
sanctions and export controls. Your 10-K  does not include any information about
contacts with Sudan.  Please describe for us the extent and nature of your past,
current, and anticipated contacts with Sudan, whet her through subsidiaries,
affiliates, or other direct or indirect  arrangements.  Discuss products and/or
services provided to, and other cont acts with, the government of Sudan and
government-controlled entities, as well as c ontacts with private parties in Sudan.

9. Discuss for us the materiality to you of  your contacts with Sudan and whether
those contacts constitute a material investment risk for your security holders.
Please address materiality in quantitative terms, including the dollar amounts of
any associated assets and liabilities, and revenues.  Please also address materiality
in terms of qualitative fact ors that a reasonable investor would deem important in
making an investment decision, including the potential impact of corporate
activities upon a company’s repu tation and share value.

We note, for example, that Arizona and Louisiana have adopted legislation that requires their state retirement systems to  prepare reports rega rding state pension

Steven J. Gomo
Network Appliance, Inc.
February 7, 2007 Page 5
fund assets invested in, and/or permits divestment of state pension fund assets
from, companies that do business with U.S.-designated state sponsors of terrorism.  The Pennsylvania legislature has adopted a resolution directing its Legislative
Budget and Finance Committee to report annually to the General Assembly regarding state funds invested  in companies that have ti es to terrorist-sponsoring
countries.  The Missouri Investment Trust has established an equity fund for the
investment of certain state-held monies th at screens out stocks of companies that
do business with U.S.-designated state sponsors of terrorism.  California,
Connecticut, Illinois, Main e, New Jersey and Oregon have adopted legislation
requiring reporting of interest s in, or divestment from, companies that do business
with Sudan, and similar legislation has been proposed by several other states.
Finally, Harvard University, Yale University, Stanford University, and other educational institutions have adopted po licies prohibiting investment in, and/or
requiring divestment from, companies that do business with Sudan.  Your
materiality analysis should address the pot ential impact of the investor sentiment
evidenced by such actions directed to ward companies that have operations
associated with Sudan.

10. We note that your 10-K discusses sales of your products in Africa and Asia.  Please advise us of any sale s into, or other contacts w ith, Iran, North Korea and/or
Syria, countries identified by the State De partment as state sponsors of terrorism
and subject to U.S. economic sanctions.  If you have contacts with any of these countries, please provide the same inform ation regarding thos e contacts as we
requested regarding contacts with Sudan in comments 8 and 9 above.

*****

As appropriate, please amend your filings and respond to these comments within
ten business days or tell us when you will prov ide us with a response.  Please submit all
correspondence and supplemental materials on EDGAR as required by Rule 101 of Regulation S-T.  You may wish to provide us with marked copies of any amendment to expedite our review.  Please furnish a cove r letter with any amendment that keys your
responses to our comments and provides any requested information.  Detailed cover letters
greatly facilitate our review.  Please understand that we may have additional comments
after reviewing any amendment and your responses to our comments.

Steven J. Gomo
Network Appliance, Inc.
February 7, 2007 Page 6
 You may contact Christopher White, Seni or Staff Accountant, at (202) 551-3461
or me at (202) 551-3226 if you have any questions regarding our comments on the
financial statements and related matters.

       S i n c e r e l y ,

       C r a i g  W i l s o n
       Senior Assistant Chief Accountant