SAN FRANCISCO -- When you fly too close to the sun, sometimes your wings melt.

Network Appliance ( NTAP) CEO Dan Warmenhoven threw up a revenue-growth slide for JPMorgan H&Q conference attendees that would normally bring tears to investors' eyes.

"This used to be one of my favorite slides," Warmenhoven said, while trying to muster a chuckle. It seems the remarkable history of Network Appliance's rapidly ascending quarterly revenues lacked a little something.

That something was Network Appliance's fourth quarter.

Network Appliance warned on April 11 that its fourth quarter would not grow the expected 10%, but would instead slide a disastrous 20% to 25%. The CEO explained that business "went absolutely dead in the February/March time frame." The company derives 50% of its storage-sales business from Internet and technology companies, a painful market to be selling to this spring. "Very honestly, they were buying nothing," Warmenhoven relates.

Toasted tech powers Cisco ( CSCO), Texas Instruments ( TXN) and Motorola ( MOT) took up three of Network Appliance's top five customer spots. Now tech and Internet companies will comprise 30% of Network Appliance's reduced business.

But wait, there's salvation at hand.

Warmenhoven insisted that, while sales aren't coming in now, the faint inklings of the beginnings of sales to come have begun. "There are signs that large customers that have been in a deep freeze are starting to put together plans for projects in the second half of 2001," he explains.

That means he's getting requests from customers for equipment to evaluate. If customers are evaluating in April, he deduces, they'll be buying in July. Network Appliance's first quarter started Monday, according to the CEO, and won't benefit from any rejuvenation in orders. He expects the first quarter to come in even with the charred results of the fourth quarter. Expect restarted technology-sector sales -- software is an early rebounder, according to Warmenhoven -- to add to revenue in the third and fourth quarters ahead.

Now, to grow those wings back.

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