Tech spending will focus on business innovation, Cisco and partners say

Chuck Robbins, CEO of Cisco at Cisco Partner Summit 2022

Cisco Partner Summits descended on Las Vegas for the company’s Partner Summit this week, the first in-person version of the show since 2019. The COVID pandemic may have caused that gap, but as CEO Chuck Robbins pointed out, things have not exactly gone back to anything resembling normal since.

“We’ve gone through a global pandemic, and none of us has ever done that before,” Robbins said. “We’ve had a ground war in Europe, semiconductor shortages, the supply chain, all kinds of climate chaos around the world, and now the impending concern over the economy. I’ve learned not to ask what’s next.”

But Robbins told partners he believes that all the world has been through over the last three years, and the role technology has played in allowing people and businesses to make it through means if the current malaise does more formally slip into recession, he does not believe spending on technology will fall as it has in past downturns.

“Over the last few years, [business leaders] have all experienced the power of technology,” he said. That exposure, and the fact that it allowed businesses to survive and succeed in the tumultuous times since 2020, mean that IT has a new spot at the table. For the first time, Robbins said, technology is not the first on the chopping block if things get tough. Instead, he said, technology, and the partners that drive its business impact, have a crucial seat at the table. And to Robbins, that means that come what may, Cisco partners “have a massive opportunity” ahead of them.

“Unlike what we’ve seen in the past, customers aren’t closing up shop and waiting for things to go back to normal because they’d be waiting a very long time,” Robbins said. “A lot of executives are telling me that technology investments are the very last thing they will cut.”

In discussion with press and analysts after his keynote, Robbins said he hadn’t seen evidence of tech spending falling off a cliff the way it did early in previous downturns. As well as the faith in technology shown by executives today, Robbins said there’d been a steady hand from today’s generation of executives, who have learned lessons rising through the ranks during the panic of the Great Recession.

While there are certainly headlines of impeding or rumoured slowdowns and layoffs across the tech industry today, Robbins said he is “not doing a whole lot in terms of running the company in relation to any challenge.”

That feedback meshes with what Lane Irvine has been hearing. Irvine, director of network business solutions at Calgary-based Long View Systems, said customers are looking at the impact technology can have to achieve more and are more interested than ever in what technology can do to drive business outcomes. That could mean a new path forward for solutions providers in downturns, current or future.

“We might not see customers doing a regular refresh because there’s time for a refresh. But we might wee people looking for a way to use infrastructure and data to improve their business,” Irvine said. “The nature of [technology] spending is changing. Businesses are less interested in maintaining the status quo and more interested in pursuing true innovation.”

Of course, that depends on partners’ access to the technology their customers want to buy. Robbins acknowledged the painful nature of supply chain issues on partners’ business and said that things are “getting better, but we still have challenges.”

He said that during the pandemic, his role was often to choose the least bad of the two bad options presented to him. “A lot of time around supply chain, I haven’t even been getting those options,” he said.

In a briefing with press and analysts at the event, Jeff Sharritts, chief customer and partner officer, said the company “doubled down on long-term purchasing” six months ago to have better supply predictability. And Oliver Tuszik, Cisco’s global channel chief, said the organization was shifting to have a “quicker to react” supply chain.

“We don’t know what’s coming next, but we’re pretty sure there is something coming next,” he said.

Of course, partners also have to make adjustments because hardware has been hard to find. In a roundtable discussion, Graham Robinson, CTO of Australia-based Cisco partner Data#3 said his organization had focused more heavily on software-heavy opportunities to keep the business growing.

Although not connected to the supply chain challenges of the last two years, that motion also maps with Robbins’ long-term direction for Cisco, which has been shifting from its hardware-centric networking model to a business focused on software and services, albeit often either driven or supported by hardware.

Today, Robbins said, Cisco realizes 44 percent of its revenues from recurring revenue models, and the plan calls for that number to rise to half of the company’s revenues over the next three years.

Robert Dutt

Robert Dutt is the founder and head blogger at He has been covering the Canadian solution provider channel community for a variety of publications and Web sites since 1997.