Cisco reported numbers that beat estimates by a penny but still showed some signs of difficulties in the markets. Switches and routers grew in the mid-to-high single digits, 5-to-6 percent lower than usual but better than the last quarter.
The Cisco numbers are consistent with our view of the current state of enterprise tech spending, which is that the investment in the current SOA-driven cycle is still carrying momentum and that budgets have not been curtailed in this area.
With software spending strong, we would expect to see hardware and networking pulled along the track. If the current quarter shows strength, it will be an indication that budgets for the year are being released more in the second half, which would be positive for the entire industry in 2009.