Despite his current troubles, Chambers doesn't think Cisco's business model needs an overhaul. He claims demand for networking equipment will pick up shortly. While Cisco will lay off the acquisitions over the short term, in part because it's reducing its workforce, buying new technologies will still be critical. If anything, Chambers thinks the current tumble in tech stocks gives him a competitive advantage. He argues that many of the companies Cisco is interested in are bargains since they've seen their value fall even more than Cisco's has, and many are desperate for capital.
Some outsiders agree.
But Chambers may be just as surprised by the future as he was by the current quarter. Many analysts seriously doubt his growth projections. That seems to be something Mr. Chambers still hasn't accepted. Elstrom covers technology in New York. The McGraw-Hill Companies Inc. All rights reserved.