Interview: Cisco's John Chambers

Well, nothing I say today should be interpreted about any in any way about my current quarter, but what we are hearing from our customers is exactly what we are all reading in the press, which is there's a lot of uncertainty as the market goes forward. In the last conference call we signaled that we thought we were headed for some relatively short term bumps, that in our view this would be relatively short term and not too deep ... Unfortunately based on the data that's come out in the last month-and-a-half or two, I think more and more people would say that's probably the scenario that's going to occur. Having said that, we do not see it being dramatic and we don't see it lasting a long period of time or being unusually deep.

Yet you remain optimistic?

These are normal bumps that occur in marketplaces. You do see the companies heading into these bumps in the best financial shape they've been in. Normally when you go into a slow down, the companies are spread too thin, don't have a lot of cash, and unemployment is already edging up. Our unemployment situation in the U.S. is relatively good. Companies have great balance sheet positions. I do think you are about to enter a new era of productivity within that scenario and you've got an unusually solid global economy. Where before the US was the engine for the world, now we are one of multiple engines. It remains to be seen how interdependent we are or are not. There are different points of views on that.

Do you see hesitancy coming down into the SMB as well or is it primarily just at the top?

No, I think it varies by industry and it varies a little bit by geography. Enterprise tends to move more as groups, where SMBs, if their business is good, they spend. If their business slows, they don't spend as much. Then the key is also, are you talking about areas you traditionally have been successful in the SMBs with or are you talking about moving in new areas, such as wireless, such as video, such as security, such as business solutions, such as collaboration, Web 2.0 technology , etc.? So it's really a question of how much of the customers' spend do you get and is the role of the network evolving as we think it is - dramatically expanding beyond what you would have described it as doing just a couple of years ago.

What's your advice to your channel partners on how to push through this?

First off, I tend to be conservative. And so the advice that I give to my channel partners is very similar to what we decide ... When you see some bumps coming, be realistic. Was it your strategy that caused it or is it the market? If it's the market, don't change the strategy. Secondly, determine how long you think it's going to last and how deep and that may vary by sector, but if you talk about the overall U.S. economy as an example, we think it's going to be relatively short-term and we think it's going to be relatively shallow ... And then you get ready for the upturn.

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