This is the continuation of my previous column on what to expect from Network Appliance. Today, some commentary on what it's doing and its strategic direction.NetApp is growing both organically and via acquisition. Its most significant acquisition is of security appliance maker Decru, which looks to be working well. Importantly, NetApp is avoiding the pitfall that entraps many companies acquiring smaller firms - Decru's own corporate culture, while certainly evolving as it folds into NetApp, isn't being trampled. Decru is a separate, interdependent division of NetApp, with the word "Decru" on the business cards appearing in much bigger print than the reference to it being "A NetApp Company." This will make it easier for Decru to maintain its current set of partners even though many of those are NetApp's rivals. Clearly, NetApp has no intention of turning off a good revenue stream, and just as obviously, both parties to the acquisition will benefit - as will their customers.Look for a strategic push into the compliance area where NetApp could marry up with software vendors or value added resellers (VAR) that provide applications and services addressing specific market segments. NetApp expressed keen interest in the oil and gas segment and in supporting medical imaging, for example, and clearly there will be many other vertical markets that will be targets of strategic opportunity. NetApp, big as it may be, is certainly not big enough to do any of these alone however (but who is?). For companies that have expertise to share in one of these areas, it sounds like the timing may be right to build alliances to help NetApp move into these areas.Clearly, NetApp has many strengths and that extends well beyond NAS. The Decru acquisition has given the company a leadership position in data encryption. Enterprise sites will appreciate its focus on grid storage (I heard frequent but always non-specific reference to this, including several mentions that the company is "InfiniBand-ready"). Add to that, the soon-to-be-released 64-bit version of the ONTAP operating system, its development efforts in iSCSI, the new virtual tape offering (based on its Nearstor machine), and its work in disk-to-disk backup (I hope to report on the last two of these at a later date) mean NetApp is well aligned to provide good service to enterprise accounts.If after all this you still wonder where Network Appliance is going, just keep in mind what has become its new corporate mantra: "Simplifying data management." It is the company's intention to scale out, becoming more heterogeneous in its scope and managing across multiple vendors' systems. Much of this will be enabled by running everything through the global namespace provided by its new 64-bit ONTAP GX operating environment. Additionally, SnapVault and SnapMirror, longtime back-up and recovery tools, are being joined by a host of new efforts in areas such as infrastructure management (data classification, monitoring and migration tools, for example), all of which eventually will manage not just NetApp hardware, but other vendors' products as well.I walked away from my discussions with NetApp with the impression is that in most areas this is a company with its strategic head screwed on properly. Also however, it is my sense that it is much less well placed when it comes to servicing smaller businesses, and that if it doesn't address this soon its present inability to reach down into the small and midsize business segment is surely going to bite it where it really won't relish being bitten.It will be interesting watching them adjust for this, particularly in the light of what EMC and other competitors are doing.