Cisco’s Chambers: We’re pretty optimistic

Cisco CEO John Chambers said today the technology recovery already is happening and that the first month of the third calendar quarter came in a little better than expected.

Speaking at the SG Cowen Technology Conference in Boston this morning, Chambers said he was maintaining his outlook that is more optimistic than many other technology company CEOs, in part because of the signs he’s seen from a variety of markets.

“The question is not has the technology industry started to turn up,” he said. “The question is, how sustainable is this momentum? What we saw during our fourth quarter was a good start on that.”

Chambers comments sent Cisco’s stock up 84 cents in mid-day trading to $20.42, a 19-month high.

While addressing the overall company and market conditions, Chambers said he was pleased that during Cisco’s fourth quarter, which ended June 30, its service provider revenue grew in what is still a tough economy.

Looking to the future, he said the company has shifted 40%-50% of its engineering resources into areas that won’t produce revenue for another two years.

On the subject of potential acquisitions, Chambers maintained his long-held stance that Cisco will not buy its market share.

“We use acquisition to move into new markets, not to acquire our competition,” he said. “I think your success rate goes down the larger the acquisition you take on.”