Over 100 attendees gathered for Network World's live chat on counterfeit network gear -- how to detect it and protect yourself -- with guest Mike Sheldon, chief executive officer of Network Hardware Resale. NHR employs more than 200 people in the United States and Europe. Sheldon discussed methods for identifying fake gear, the refurbished hardware industry's efforts to educate users about counterfeits and Cisco's role in eradicating this growing problem.
The news has been full of reports of counterfeit gear lately - particularly Cisco gear - and the potential harm it could cause. As you might imagine, the refurbished hardware industry has developed a lot of expertise at detecting fake gear.
Network Hardware Resale is not an authorized Cisco reseller nor is it affiliated with Cisco in any way. Mike has been an outspoken personality in the whole area of fighting counterfeits and has plenty of insight to share, but his opinions are his own. Prior to NHR, Mike worked for nine years in investment banking for UBS and Barclays Capital in New York.
Are there counterfeit cables being sold?
Not to my knowledge - but keep in mind there are a lot of generic cables being manufactured and sold, and they are functionally identical to the Cisco-branded cables, perfectly legitimate for Cisco customers to use, and also very inexpensive. Given that the main difference will be the presence or absence of the Cisco logo on the head of the cable, a counterfeit cable would certainly be possible to make, but I've not heard of them - hard to make a living selling $4 cables.
It seems clear that counterfeits are mostly identified by failure of components. How else are counterfeits identified? I am interested to hear how Cisco and the hardware industry in general are addressing the counterfeiting problem. Other industries, like software, are using embedded digital signals/signatures; the pharmaceutical world thinks that it is addressing counterfeiting with mass serialization and RFIDs.
Cisco has evolved from simple serial number stickers many years ago to hologram stickers on many pieces of equipment today, as well as embedded Common Language Equipment Identification (CLEI) codes, IDPROMs, some of which are proprietary to Cisco, that must match data on the exterior of the unit itself. Some Cisco products reject components that do not have the correct internal codes.
Where are most of the counterfeits coming from?
Almost all comes from Asia, China being the overwhelming culprit.
There has been a lot of articles written about the FBI's Cisco Raider sting. Cisco Gold partners were caught selling counterfeits into government accounts. How can this happen? I thought only gray market companies sold counterfeit.
Just so everyone is one the same page, "Cisco Raider" is the FBI's name of an ongoing multi-agency counter-counterfeiting initiative. Yes, the main culprit in the FBI's quietly circulated PowerPoint was counterfeit sellers (many from eBay) selling to GSA-approved vendors who would then resell on to the government, and many of these GSA vendors were Cisco authorized partners. The channel community sells boxes, the secondary market sells individually used pieces of hardware. I think if you deal with a trustworthy channel partner, who buys from Cisco directly, you are totally covered - but good secondary market vendors are no more the source of counterfeits than Ingram or Comstor. It's the low-end bottom feeders that are the issue.