TechPulse 360

Cisco is not seeing unusual volumes of used gear being sold, said John Chambers

The present downturn facing technology companies with slumping sales and slowing investments in new products is unlike others the industry weathered in 2001, 1997 and before, says Cisco Systems CEO John Chambers.

A powerful wave of innovation coming from the industry didn’t exist at the start of other economic pullbacks, Chambers said Wednesday at the company’s C-Scape meeting for analysts. That could blunt the impact an expected global recession will have on the business.

“There has never been a time in my lifetime where there has been as much change on a global basis,” Chambers said, describing the environment facing companies here and abroad.

But technology companies stand at the beginning of the next generation of the Internet, he claimed, with the growing use of video, collaboration and virtualization driving change.

Chambers suggested innovation could help lift the nation from the economic malaise. “We are going to see the U.S. be the first out of this global slowdown,” he said.

Hoping to capitalize on the turmoil, Cisco intends not to be a shrinking violet. The company will expand into new and existing markets even as it cuts at least $1 billion in expenses over the next several quarters.

Chambers promised aggressive investment in India and China and said he would simultaneously examine opportunities in Mexico and Brazil. He also vowed to use some of Cisco’s $27 billion in cash to pursue acquisitions

“We’re probably going to be a little more selective than in the past,” he said, but “I do intend to very active moving into these (new) markets.”

He also said he has not seen unusual piles of used Cisco gear being sold on re-seller markets from companies going out of business, despite speculation to the contrary. “We are facing no abnormal pressure on our discounts,” he said.