Network Appliance Taken Apart

"We're seeing a definite reduction in spending on capital improvements from most of our major accounts," Warmenhoven said.

The trouble is limited to the U.S. and U.K., as some of the largest economies in Europe and Asia continue to lead generally strong demand on those continents.

The giant legacy telecom carriers France Telecom(FTE Quote) and Deutsche Telecom (DT Quote), for example, have increased spending, said Warmenhoven. And Japan continues to lead growth in Asia.

Warmenhoven tried to ease the pain by saying that the customers causing the weakness are not switching to competitors like EMC (EMC Quote) or Hewlett-Packard (HPQ Quote). He said the company has maintained the same "win rate," or the pace at which it wins new business over alternative providers.

Network Appliance's troubles aren't completely unexpected. The company ended the fourth quarter on a sour note. Then, Warmenhoven said that the company hit an "air pocket" at the end of the quarter as prospective customers delayed purchases and the number of new contacts slowed to a trickle.

He said the company entered the first quarter with a smaller backlog than usual, which could dent the quarter's revenue and profit. The company took a hit for issuing guidance sharply below analysts' estimates.

At the time, Warmenhoven conveyed a similar message to his statement on Thursday, saying that the slowdown in purchases was systemic and that Network Appliance's competitors were suffering as well. He took pains to emphasize that his company was not losing market share.