Counterfeit network gear: used gear makers fight the battle

Over 100 attendees gathered on Wednesday, June 18 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.

NHR is not an authorized Cisco reseller and Sheldon is known for being an outspoken critic of the way top vendors (Cisco in particular) are handling counterfeit gear. The full transcript can be found on this page but here's an excerpt:

Concerned: 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.

Mike_Sheldon: 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.

...

insouthchicago: How much of a security problem do you think counterfeit gear might be? I can think of several scenarios where the counterfeit gear allows someone from the outside to spy on targets who have installed what they thought was legitimate equipment.

Mike_Sheldon: I don't see any evidence of that, nor have we ever seen anything - hardware or software – installed on a Cisco router for these purposes - it is certainly possible, but we haven't seen it.

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qsidick: 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?"

Mike_Sheldon: 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).

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