Cisco Systems Inc. (Nasdaq: CSCO) might --
might -- be seeing the early signs of business getting better, at least in the United States.
The logic laid out by CEO John Chambers on Wednesday's earnings call went like this: Cisco saw the latest downturn unfolding as U.S. state and local governments pulled back spending first, followed by enterprises, the U.S. federal government and commercial markets.
In Cisco's fourth quarter, which ended in July, the company saw "positive growth or up-trends, especially in the second half of the quarter" in all those sectors except the federal government.
That month and a half of data is way too small a sample to declare a trend happening, Chambers said. But he did say that if things continue in that direction during the current quarter, it would be a good sign for the U.S. market in general.
That doesn't mean everything is great. "Europe's going to get worse before it gets better," and federal spending isn't going to recover quickly, Chambers said. But it's a contrast to other companies' predictions of the economy continuing to dampen sales. (See
Adtran Expects Flat Carrier Spending and
Tellabs Joins the Party.)
Cisco expects its own revenues for the first quarter, which ends in October, to be 2 percent to 4 percent higher compared with a year earlier. That range doesn't sound so big, but the comparison is against an October 2011 quarter that was unusually good, Chambers said. (See
Cisco's Comeback Quarter.)
Those figures translate into anticipated first-quarter revenues of $11.5 billion to $11.7 billion. Analysts polled by
Thomson Reuters were expecting $11.66 billion.
Cisco didn't provide any new commentary about software-defined networking, not even after seeing
VMware Inc. (NYSE: VMW) acquire
Nicira Networks Inc. (See
VMware Insists It's Not Warring With Cisco.)
Chambers reiterated Cisco's conviction to lead the SDN transition. He said Cisco's view is that hardware and software will both be important in an SDN world and that Cisco's framework, the Open Networking Environment (ONE), is an advantage over the competition, particularly when combined with Cisco's visibility into long-term customer needs. (See
Cisco Takes ONE Step Beyond SDN.)
Cisco's SDN discussion usually includes a mention that the company's virtualized router, the Nexus 1000v, arrived in 2009, well ahead of the SDN trend. Chambers brought that up a couple of times during the call. SDN "didn't sneak up on us," he claimed.
He didn't get asked whether Cisco tried to buy Nicira. (See
Does Cisco Need Nicira?)
— Craig Matsumoto, Managing Editor,
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