During a keynote speech here Tuesday, Cisco Systems CEO John Chambers said slowdowns in enterprise capital spending will limit company growth during the next 12 months, but the networking giant expects to pull through by focusing on corporate partnerships and paying closer attention to its customers' bottom lines.
Chambers encouraged business customers at Cisco's annual Partner Summit to respond more quickly to their customers' demands.
Because many businesses have become reluctant to invest in infrastructure due to the economic shakeout, while others have become more sophisticated about networking technology, Cisco and its partners must work harder to deliver a better return on investment -- or "payback applications" -- to their customers, according to Chambers.
"There's a focus on ... profitability like I've not seen during my business career," Chambers noted. "Customers are saying, 'I want to focus on looking out two or three years, but my job depends on improving in the next 12 to 18 months as well.' That's the fundamental change that I've seen in the industry."
According to Chambers, executives are thus paying less attention to certain kinds of specific technologies, such as broadband connectivity, and are instead scrutinizing their balance sheets more closely. "CEOs [are moving away] from this gigabit philosophy vs. ATM vs. DSL vs. cable. They couldn't care less," he said.
"All of us have to change what we deliver to our customers," he said, adding that in the near future he expects Cisco's partners -- not its internal sales force -- to account for the majority of the firm's sales, distribution, and support.
However, Cisco's range of offerings will keep the company afloat, Chambers claimed, remarking that "the productivity of the applications is so strong that companies will not be willing to be left behind."
Chambers also admitted that the sagging economy will hurt Cisco's chances to grow during the next year, commenting that "when capital spending slows ... we will be affected." But he also insisted that the downturn could actually help the company.
"Where you grow market share is always during the tough transitions," he said. "It's difficult to break away during normal times, but during tough times, you can do it."
Chambers also hinted at new technologies that will be unveiled at the Summit, including offerings in content delivery, IP telephony, and wireless.
Earlier in the day, Cisco rolled out a certification program for service provider customers that use the company's IP+Optical gear, which provides IP services over fiber lines. According to a press release, the certification is awarded to companies that build end-to-end optical networks that are driven by Cisco platforms. Cogent Communications, a Washington-based ISP, was the first company to be granted the IP+Optical designation.