How the used gear industry is winning the fight against counterfeiters

A used gear dealer shares tricks for detecting counterfeit gear, but says the biggest issue is Cisco's lack of cooperation

Your opinion? Cisco wants to keep a manageable amount of counterfeit gear on the market as a tool to keep concerned end users asking the question "Why aren't you cooperating with Cisco?" and to keep them asking the question "How can I be sure of authenticity unless the product is purchased through a Cisco authorized channel?"

I wouldn't bet against it, but really I hope it's just negligence. The presence of counterfeits does offer Cisco a great FUD tool in its competition with the secondary market, but the Cisco Raider report shows the fallacy of that argument. The right answer is to buy from those who can tell the difference, and have been doing so for years, rather than to buy from anyone with a Cisco partnership (like that premier partner on eBay selling WIC-1ENET for $15).

But it is not in Cisco's interest to clear up the counterfeiting, right? It allows Cisco to cast doubt on the market and maintain absurd margins (especially with the government). Otherwise Cisco would respond to bona fide industry groups/players (as other OEMs do), instead of demanding all info then refusing cooperation. Have you asked the government to look into why Cisco won't cooperate?

I've heard a lot of good thoughts along those lines. Cisco is very arguably a monopoly in the networking market, and that brings with it - or should - a certain responsibility. When its margins on memory and GBICS are something like 90 per cent+ and overall margins around 65 per cent+ (I think it's actually 67 per cent?), there are good financial reasons to use whatever tools available to push people to the channel. What is true is that Cisco makes great products that last a long time. It is inevitable, though frustrating for Cisco, that these will be (and SHOULD BE) reused. They are inexpensive, functional, supported, and even a bit green.

It would appear that Cisco is intentionally blurring the lines between counterfeit and legitimate secondary market product to intimidate customers into buying only from the channel. I would think that Cisco would help protect its customers by clearly identifying what measures it could take to protect themselves besides buying new.

I agree with you 100 per cent, as did the FBI in its presentation. The best remedy would seem to be education and cooperation with a very loyal support group for their products - the secondary market. Keep in mind as well that if its recertification fees made any sense - they are absurd - and it allowed us to easily put our products on SmartNet, Cisco stands to gain tens of millions of dollars in revenue.

Are other vendors' gear are also being faked or is it really just Cisco?

Many others - computer NIC cards for example. I know IBM, HP, and others are involved in combating the problem.

You mentioned that Alibaba is a site where counterfeit items are sold. Cisco made a huge investment in Alibaba (I think close to 20 million), so why would it invest in a site that promotes counterfeit Cisco equipment? Furthermore, why would it continue to manufacture in China?

That is a great question. They are no harder to find there then they are on eBay, and many are the very same sellers. Regarding where to manufacture, I can't imagine it's more complicated than cost, but that's a good question for Cisco.

What is your opinion on used equipment dealers gathering together, sharing information to help combat the counterfeit problem?

I'm glad you asked. We have! Many secondary market Cisco vendors have banded together to form a trade association called UNEDA (http://www.uneda.com/) whose sole purpose is to ensure the quality of and promote the value of secondary market products. Our top initiative is counterfeit identification and education for members, and we expel any member who is found to knowingly have resold counterfeit goods.

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