Hidden costs in 'grey' Cisco kit

IT departments that take advantage of an influx of cheap imports of Cisco equipment, discounted at up to 70% on normal prices,...

IT departments that take advantage of an influx of cheap imports of Cisco equipment, discounted at up to 70% on normal prices, could be left with substandard equipment and no proper support, it was claimed this week.

The warning follows revelations that suppliers are buying up discounted Cisco equipment intended for the Chinese market and excess stock from wrongly calculated manufacturing runs, and shipping it back to the UK.

"Discounts given on grey goods can range from 10% to 70%. The Cisco channel is totally out of control and Cisco does not appear to care," said one Cisco reseller, who asked not to be named.

Analysts warned users to find out if grey goods were included in low-cost deals as there could be issues of device quality and support which may not be justified by the smaller initial outlay.

"The capital outlay on networking equipment is a small proportion of total cost of ownership - the bulk goes on support and maintenance - so it is often not worth skimping," said Andy Rolfe, an analyst at Gartner.

Where kit has come from a discounted consignment intended for another customer there could be problems with legal title to software, which could affect a user's right to software support and upgrades, Gartner said.

A Cisco spokesman said, "Cisco software licences, warranties and support services do not transfer to new owners when used equipment is sold through the grey market. Individuals that purchase equipment from the grey market will not receive the product support and other benefits that are typically associated with Cisco's brand."

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