Enterprise Purchases The Key To 'Recovery'

It might not be the news everyone wants to hear, but it's the truth: It ain't a recovery until enterprise buyers say so.

Cisco CEO John Chambers admitted as much yesterday, tempering the news of a decent fiscal quarter with caveats about "cautious" enterprise CEOs, who apparently have the gall to keep their capex checkbooks under close guard.

While Chambers seemed a bit flummoxed by enterprise customers' reluctance to sign purchase orders, he only needs to review his own presentation to start to figure out why. Cisco, he proudly told the conference-call listeners, was doing a great job at increasing productivity while keeping headcount flat. Clearly, the company has sharpened its focus on operational costs -- so why should Cisco's customers behave any differently?

Perhaps it's not fair that the markets spanked Cisco a bit today for being the bearer of bad tidings, but in the end maybe we'll all end up thanking Chambers and Cisco for not giving any extra shove to the "recovery" bandwagon that everyone seems too ready to join. Despite rosy forecasts for a return to spending, enterprise customers these days seem to be taking more time with new purchases, weighing the benefits, risks and return on investment before placing an order.

And that's a good thing, because it gives customers a better chance of making the right choice for their enterprises. Integration with existing systems and a scalable approach to future expansion may not be the sexiest things to put on a press release, but they are the types of features that will fuel a real and recurring stream of revenue.So, investors and analysts may be disappointed in Cisco's lack of enthusiasm for helping to blow up the next bubble. Maybe instead of watching financial channels on cable TV or stalking online chat rooms, stock-market remoras should spend more time talking to the people who order, install, administer and justify the worth of new networking gear. Then, maybe they'd get a better picture of when and how a real tech recovery might occur.