Global Warming’s Best Kept Secret

When most of us think about the Chinese impact on the environment, we consider their major manufacturing facilities spewing out carbon dioxide at an alarming rate with no sign of slowing anytime soon. China threatens to become the world's biggest emitter of greenhouse gases by November this year, partly because it manufactures products to satiate the bulbous American appetite and consumption demands.

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A chimney spouts a column of smoke in residential and commercial district of Beijing, China. (AP / Elizabeth Dalziel)

However, the burning of fossil fuels is not the only environmental impression being made in the Far East. Believe it or not the manufacturing of counterfeit electronic equipment is the silent killer here and a major contributor to the earth’s negative health prognosis. What’s the connection? Did you know that according to recent study by IT market research firm, Gartner, the energy from manufacturing, distribution and use of information and communications technology emits approximately 2 percent of total global carbon dioxide, which is equal to the emissions from the entire airline industry. The largest culprit in this category is “e-waste” defined as a waste type consisting of any broken or unwanted electrical or electronic appliance. It is a point of concern considering that many components of such equipment are considered toxic and are not biodegradable. The number one combatant for the global e-waste problem has been a recent focus on “Reuse.” Reuse is responsible for bringing new-life to excess or discarded electronic items before they are casually disposed of and turned into a nocuous e-waste. Thankfully, as a natural result of consumer’s dual demands to reduce costs and reduce global warming a secondary market for refurbished electronic goods has flourished. So what’s the problem? The Chinese relaxed attitude towards intellectual-property rights and often state-sanctioned piracy and counterfeiting facilities have become increasingly sophisticated. The inability to discern between the authentic products and the counterfeit is a narrowing margin at best. Sophisticated counterfeit products have placed a real threat on those secondary markets designed to extend the lifecycle of an electronic product and keep it from transforming into e-waste. A perfect example is counterfeit Cisco equipment, collectively referred to in the industry as “Chisco” (counterfeit Cisco equipment originating in China). Over the past decade the secondary market for network hardware has flourished. The late dotcom bubble burst flooded the market with excess network hardware which was perfectly functional and valuable to many organizations with budgetary constraints. On account of the high price points for Cisco equipment, coupled with the availability of their hardware in the used market, resellers like UsedCisco.com grew in leaps and bounds. Like the auto industry, where the “used” market is even larger than the “new,” the secondary market for refurbished network hardware is poised to grow at a similar rate. Until now: Chinese sophistication and distribution of Chisco has placed a real threat on the secondary market for Cisco equipment. Network managers have grown fearful of the potential to acquire counterfeit network hardware products. Their networks cannot afford to fail on account of a faulty switch or router. Worse, their jobs could be compromised on account of a poor purchasing decision. Therefore, network managers are beginning to shy away from the cost savings that refurbished hardware represent and defaulting towards a more expensive peace of mind solution in buying new. According to a white paper by AGMA and consulting company KPMG, counterfeit products account for nearly 10% of the overall IT products market. That's $100 billion in fake memory sticks, drives, monitors, networking gear and other IT products floating around. “The vast majority is still being purchased from gray market, uncertified resellers who unload their goods on eBay at extremely low prices,” says Scott Augenbaum, supervisory special agent for the FBI Cybercrime Fraud unit in Washington, D.C. If the secondary market slows, the “reuse” movement will be dealt a serious blow. Countless pieces of valuable equipment will end up being broken down and processed through poorly managed facilities, in developing countries, leading to significant health risks and causing a major negative impact on the environment. The Cisco counterfeit efforts in China are certainty short sighted and harmful to all living species in the long run. With just a few simple tips outlined below and some knowledge about how to identify Chisco, we will be back on the right track in no time. How to protect yourself: Buying secondary network hardware is not a risky endeavor for the educated buyer. Here are the tips you need to help you locate a qualified reseller and help take advantage of the incredible value offered in the secondary market. Be vigilant about who you purchase from. Make sure you use a reputable reseller, this includes, history in business, references and warranty replacement policies. As long as you stay away from eBay and deal directly with resellers who have longstanding history in the industry, a written replacement policy guaranteeing the authenticity of their products and a clean supply chain there is no problem. Customers who shop in the secondary market save an average of 65 – 95% off list price and usually receive a minimum warranty of 1-2 years on their purchases. Included below is a comprehensive guide for identifying counterfeit Cisco fakes. Guide background: This guide is a collaboration of several years of Cisco purchasing experience as well as many articles that have come out on the subject. The information provided here was an internal document that has been closely guarded at UsedCisco.com for the past 4 years. This exclusive information was kept proprietary for fear of tipping off the counterfeiters and assisting them in perfecting their efforts. “We hoped by publishing these secrets and through the collective contribution of others we can help put the counterfeiters out of business” Said Stephen Dale, Web Systems Director at UsedCisco.com. The content is rapidly changing as counterfeiters become more and sophisticated. The guide is broken down into 6 separate categories: Packaging and labeling discrepancies, clues in the manual, visible interior and exterior flaws, how to choose a sourcing channel, and pricing identifiers. It is recommended that you print and display this guide for anyone in your organization that comes in contact with your inventory. Relevant departments include, purchasing, sales, warehouse operations, fulfillment and all management personnel. Remember, with all the changes, the best indicator of a fake is going to consistently be, “price.” A 65 – 95% discount off list price is standard in the secondary market. However, If you are getting quoted a discount in the neighborhood of 40-55% off list for a brand new item, in a sealed box it can be a red flag. Standard discounts usually range from 15-25% off list price on new/sealed hardware (not including schools and government accounts). Make sure you are being quoted a fair and realistic price. Expect a reasonable discount, but; too big is a sure sign of trouble. Remember the old adage, “If it seems too good to be true, it often is.” ================================================= UsedCisco.com Internal Guide for Spotting Counterfeit and Fake Cisco Products Most Popular Fakes: network modules, port adapters, WAN interface cards, GBICs and the less expensive routers. Packaging & labeling: - Look for obvious discrepancies between real and fake boxes - Absence of a seal on back identifying weight - Packaging quality and material consistency - Logo should be exact, pay careful attention to the typeface (font) and line letter spacing - Low-resolution (fuzzy) text, images and bar codes Best Indicator: Devoid of Cisco seal tape or a Cisco hologram Manual: - Look for spelling errors - Typeface: Note the consistency of the font being used Price: - Red flag 40-55% off list "NEW" (normal discounts in the secondary market range from 60-95% off) Exterior: - Metal tone and color: The genuine face plates may be shiny on top but is clearly flat metal on the front. The counterfeit may seem dull or flat finished all around. - Screws: Droopy and shiny on fakes the lines are not fine and almost seem sand cast. - Paint should not run - LED coloring

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Interior: - Chip color and alignment. Should be a hologram present - Screws: Droopy and shiny on fakes the lines are not fine and almost seem sand cast - Connectors - Serial number positioning and clarity of print - Check serial numbers against Cisco database - Sloppy wiring - Sloppy welding on the attachments Best Indicator: Positioning and color of the hologram

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Sourcing: - Ebay channels are the most popular market for fakes - Ask for a product photograph from suppliers - Reputation of broker • How long have they been in business • References (bank) • Will they guarantee the authenticity of the part in writing will be refunded in full without any restocking fees or special handling charges Best indicator: DO NOT buy direct from China ======================================================== Taken from: Green Your Network Blog Reuse…Save up to 90% off list price and save the environment too when you shop at UsedCisco.com By Joshua Levitt E-Commerce Sales and Marketing Manager for UsedCisco.com Sign up to receive the Green Your Network blog via email

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