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December 08, 2009

Cisco�s Chambers Bullish on 12 to 17 Percent Company Growth

By Paula Bernier, Executive Editor, IP Communications Magazines


John Chambers in at an analyst event today pledged his goal to return Cisco Systems (News - Alert) to 12 to 17 percent growth.

 
Cisco’s Chairman and CEO also: talked about the company’s efforts to move into at least 30 “market adjancencies”; promoted its advancements in the collaboration space, among other areas; and – in case anyone wasn’t already aware – on more than one occasion emphasized Cisco is not focused on a strategy to deliver low-cost boxes.
 
Last year was all about cost cutting, he said, but in the past 18 months customers have cut all they can. Now, he said, customers are focused on growing their top and bottom lines and want to learn how new solutions can help enable that.
 
As a result, he said: “I am more comfortable than I’ve ever been with 12-17 percent number.”
 
He added: “We have no fear, we have a lot of healthy paranoia about what can go wrong, however.”
 
The company has moved into at least 30 adjacent markets to help fuel that growth, he said, adding “thirty is probably too few,” and has beat analyst expectations four quarters in a row.
 
Emphasizing the speed at which Cisco can act on new opportunities, Chambers said he can take an idea and ask Cisco managers for a strategy around it, and the team can have it in front of broad of directors within two months.
 
One of Cisco’s most recent and obvious successes in moving into a new area is its work on the collaboration front. Chambers said collaboration, virtualization and video are the big bets a Cisco, and he added that 2009 was all about collaboration and Web 2.0. Of course, one of the four Cisco acquisition’s announced this year was that of Tandberg (News - Alert).
 
Chambers added that “there aren’t going to be any big surprises with Cisco financially. The only question is do we spend a little more money to get into markets in the short term.” He also noted Cisco’s already well understood success at acquiring and integrating it acquisitions, saying: “Who’s better at acquisitions than Cisco? Name me one company.”
 
He also talked about how Cisco’s partners are an every-changing cast of characters, saying partners like IBM (News - Alert) and especially HP are becoming competitors whereas others like Reliance and Tata are moving closer into the Cisco fold.
 
In any case, he said, Cisco believe the future is not about providing stand-alone boxes, an area in which Chambers believes Asian vendors will lead, but rather about offering solutions, consulting and focusing on customer needs.
 
That’s because the hard part of introducing new solutions is making related process changes and cultural changes – the hard part is not the technology, he said.
 
Cisco’s four pillars are speed, scale, flexibility and growth, he added. “It is definitely working at Cisco,” he said.
 
“We run our business three to five years out, and that’s how we make every decision” not on a quarter by quarter basis, he said, so Cisco is constantly filling the pipeline with new opportunities.



Edited by Michael Dinan


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