Poking Cisco In The Eye - InformationWeek

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1/29/2008
12:21 PM
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Poking Cisco In The Eye

Cisco frowns on resellers of used network hardware because it doesn't get a cut of aftermarket sales. Network Hardware Resale (NHR), a prominent reseller, is going a step further by offering an alternative to Cisco's SMARTnet maintenance service -- a key revenue source for the networking giant.

Cisco frowns on resellers of used network hardware because it doesn't get a cut of aftermarket sales. Network Hardware Resale (NHR), a prominent reseller, is going a step further by offering an alternative to Cisco's SMARTnet maintenance service -- a key revenue source for the networking giant.Called NetSure, NHR's service offers 24x7 technical support from Cisco-certified technicians and next-day hardware replacement. NHR claims the service costs 50% to 90% less than a SMARTnet contract. While NHR sells new and used hardware from a variety of vendors, Cisco accounts for 85% of its business.

NetSure is a jab at Cisco because it encourages companies to use, or continue using, second-hand gear. It also lets customers hold on to end-of-life equipment that Cisco no longer supports, rather than purchase new products.

NetSure also is part of an ongoing effort to legitimize used gear. Cisco paints the secondary market as run by hucksters and awash in stolen and counterfeit products. It has a point: The U.S. Customs and Border Protection agency recovered more than $14 million worth of counterfeit computer hardware in 2006, including switches, routers, and interface cards. And a lack of trust in used gear was the No. 1 reason IT won't buy from the secondary market, according to an InformationWeek survey.

NHR counters that reputable resellers have mechanisms in place to spot counterfeits and keep them out of circulation. It also points to reseller organizations such as UNEDA that strive to maintain a high level of business integrity and product quality among its members.

The fact is, the market for used gear is alive and well. That same survey shows 45.5% of respondents occasionally buy used equipment, and almost 15% do so regularly. If NetSure is a success, those numbers may grow.

You can read more about the pros and cons of used gear here.

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