As The VAR Guy somewhat expected, Cisco CEO John Chambers today made cautious statements about the economy and IT spending in selected markets across the U.S. and Europe. The current economic turbulence should not be confused with the dot-com bubble bursting in 2001, but many signs indicate that we are now witnessing an IT spending slowdown.
After U.S. markets closed on February 6, Chambers discussed Cisco’s latest quarterly financial results, indicating that spending slowed considerably from December to January in the United States and Europe. To see how dramatically Chambers’ mood has changed in recent months, check out this quick news article from Reuters.
Still, Cisco’s challenges appear tied to the economy, and partners say the company continues to execute well on its unified communication and Data Center 3.0 strategies.
In recent months, some Wall Street firms and financial bloggers have suggested that certain portions of the IT industry — particularly managed services and software as a service (SaaS) — are immune to an economic slowdown. The VAR Guy violently disagrees.
So far, anecdotal evidence suggests that demand for managed services remains strong, according to MSPmentor.net. But there are signs that the economy is beginning to impact the SaaS and open source markets.
During the 2001 spending slowdown, The VAR Guy always gave his staff the following advice: Continue to live life to the fullest, but order the pizza instead of the lobster. Given today’s thoughts from Chambers, The VAR Guy is sticking with his pizza.
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I was on the call with chambers. We mostly serve commercial customers (SMB), not large enterprises. We haven’t witnessed a slowdown or spending pullback by our core customers in SMB.