Cisco’s Chambers sees SMBs leading recovery

Small and midsize businesses are likely to form the leading edge of a recovery in the U.S. economy and IT spending, Cisco President and CEO John Chambers said Tuesday.

“Small business will be the primary job growth (engine) in this next decade for this country, but it will also (adopt) technology at a faster pace … and potentially at a much faster pace than the enterprise customers have traditionally done,” Chambers told reporters and analysts at a panel discussion on Cisco’s campus in San Jose. The panel focused on IT in SMBs, an area of increasing focus for Cisco and the target of a $150 million marketing campaign that began earlier this year.

Recent advances in IT could help small businesses recover more quickly from this economic downturn than from earlier recessions, in part because the Internet can give them a longer reach for distribution and customer support, Chambers said.

Other panelists also expressed cautious optimism.

Companies may soon begin the long-awaited replacement of their PCs, according to John Edwardson, chairman and CEO of CDW Computer Centers, a major national reseller in Vernon Hills, Ill. Recent CDW sales figures show unit sales of PCs up from last year, he noted. Systems that were purchased in 1999 as insurance against Y2K meltdowns are now four years old, so IT managers may consider them ready for replacement, he added. In addition, CDW customers, two-thirds of which are small businesses, are shifting to notebook PCs for mobility, he said.

“Notebooks are going to become the desktop of the future,” Edwardson said.

Other hot products include wireless LANs, Ethernet switches, routers, combination printer-scanner-copier-fax machines and software, especially firewall and other security software, Edwardson said.

Christopher Younger, president of Englewood, Colo., system integrator Expanets, also is optimistic about sales to small businesses. One promising development is that lenders are becoming more generous, making it easier for the businesses to finance IT investments. Young believes this is partly due to trial by fire: Those small businesses that are left standing after the past few years are likely to be better credit risks than many that were looking for loans before the downturn, he said.

Also at the Tuesday talk, Chambers repeated his call for a strong national policy to promote broadband, and he expanded the crusade to wireless data policy. Every American should have at least two choices for broadband by the end of this decade, and wireless policy should allow many different kinds of devices to take advantage of wireless bandwidth, he said.

The U.S. lags behind all other major industrialized countries on broadband policy, he said.

“If this country doesn’t move dramatically faster on broadband implementation … and on finding effective ways to share the wireless, we’re going to be at a major competitive disadvantage. … We have to move faster,” Chambers said.