Cisco Gets Boost From the Cloud, Cost-Cutting: CEO
Special to CNBC.com
Cisco's better-than-expected revenue growth was from more than "routing and switching," CEO John Chambers told CNBC Wednesday, it was also data centers, cloud computing and $1 billion in cost-cutting measures.
"It goes way beyond routing and switching, which was also good. It goes into collaboration, it goes into cloud, data centers and architecture," Chambers said after Cisco's earnings and revenue handily beat analyst expectations. "So we were pleased with the quarter. It’s a journey but it was a good start."
He added that Cisco "achieved our $1 billion goal on cost reductions a quarter earlier, but we reorganized ourselves to be aligned with how our customers make decisions. Our relationships with our customers have never been tighter and you’re gonna see some pretty good numbers" in the enterprise, data center and commercial parts of the business, he said.
One big drag — the public sector. "Government spending will go in waves," he said, particularly U.S. federal government spending, which he sees getting weaker before it gets better. But that is balanced by continued spending around the globe, including in northern Europe, which Chambers said has "a little more balance...than people may think."
He said after investing six years ago in what is now the cloud, Cisco is gaining market share from competitors, including Hewlett-Packard .