In the first week of April Chambers faced three thousand delegates at Cisco s annual partner conference in Las Vegas. A lot has changed since his optimistic speech in December. Cisco s revenues are by its own admission flat or even in decline as the slowdown begins to bite and major buyers such as PSINet experience acute financial difficulties. The company now expects the downturn to carry on for three quarters. It is also beginning to bite in Europe, where Chambers sited turbulence at his service provider clients and American multi-nationals.
Fewer sales have a negative impact on inventory levels.
Cisco s share price is down to levels unimaginable a couple of months ago, limiting room to maneuver. Juniper Networks remains a thorn in the side, despite Cisco s attempt to meet the challenge head on by introducing its 12400 line of Internet core routers. The optical business has experienced an apparent setback with the announcement that Cisco will be discontinuing its ONS 15900 Wavelength Router aimed at service providers. IP telephony is still characterized by a wide gap between the sophistication of the technology and the slow uptake by enterprises. Cisco s acquisitions machine headed by chief strategy officer Mike Volpi has ground to a halt, with the result that the company can no longer grow its intellectual capital by leaps and bounds as it did in 1999 and 2000, when it was acquiring two companies per month.