Cisco CEO comment causes concern

After Cisco CEO John Chambers talked to Reuters in an interview about the economy, the stock price dropped and financial analysts cut price targets for Cisco stock. But there is also an upside.

Reuters posted Chambers' comments Wednesday in a larger story, one that focused on how he sees the role of CEO at Cisco changing. That was fascinating in itself. He told Reuters that his role has been one of "command and control," where he could make 65,000 people move in a certain direction. With Cisco now diversified into many different product areas, he says that kind of direct control isn't feasible, and that Cisco's CEO in the future will be more like "a leader of a council."

The market, however, appeared to hone in on another remark he made to Reuters, one where he said that many Cisco customers see the economy picking up steam early next year rather than later this year. Reuters said the day's 5% drop in Cisco stock was a result.

Perhaps of greater importance were the lower price targets for Cisco stock, coming from financial analysts RBC and UBS. But as Network World's Cisco Subnet blog notes, UBS said Cisco still retains strength in IP routers for service providers.

Even blogger Brad Reese, who occasionally can be tough on Cisco, relayed an acknowledgement that during hard economic times Cisco often will gain market share.

And it's true. Historically that has been the case. When times are tough, Cisco's competitors seem to get hit harder, and Cisco emerges stronger than it was before. So while all eyes may be on Cisco - and all ears may be listening to whatever Chambers says next - it will be more telling to see how Cisco's competitors are holding up.

Jeff Caruso is site editor at Network World.