Cisco's Chambers not concerned about trouble ahead

LAS VEGAS (Telephony)—John Chambers, president and CEO of Cisco Systems, today opened up the annual Cisco Partner Summit by noting he’s not concerned about losing market share while enterprise and service provider customers are cutting their capital expenditures.

To the contrary, every time an economic downturn has hit, Cisco and the overall market has grown, he said.

“What happened in 1994 is very similar to what’s going on today,” he said. “The short-term will be more challenging than any of us probably imagined.”

Pinning a more concrete number behind the prediction, Chambers believes the overall IT/telecom market will grow 30%-50% annually over the course of the decade.

“Every major company of any size by the end of this decade will be an e-business,” he said.

To be sure, many of current technology leaders and about half the members of the Fortune 500 will be gone by that time.

“There’s a focus on profitability like I’ve never seen in my business life,” he told the assembled crowd of about 3500 partner executives. “None of us in this room are immune from capital-spending slowdowns. You’re beginning to see that expand globally at a pace that shouldn’t surprise us in hindsight. The key is for this not to occur the second time around.”

Getting over that slowdown will require partners to provide value-added services they may not have considered a few years ago, Chambers said.

“What was considered a good job just two or three years ago that customers would pay extra for is now a commodity,” he said.

Currently, Cisco gets more than 80% of its revenue through partnership channel sales. Those partners, who touch virtually every major market in the world, will become increasingly important.

“This decade will be all about partnering,” Chambers said.