4 ms·

I'm wondering, what's to gain in all this? Does switching to slightly different parts (e.g. Micron vs Spansion flash module) make the final BOM so much cheaper

I'm wondering, what's to gain in all this? Does switching to slightly different parts (e.g. Micron vs Spansion flash module) make the final BOM so much cheaper that it's worth manufacturing a fake Ethernet switch? Just by taking a look at PCB pictures it looks like the counterfeiter managed to get their hands on some scrap or older revision boards and even went through more hoops (like that "modchip" design) to make them boot. Seems so overkill for a switch that goes for 250$ used - am I missing something?

fuzzy2 6y ago
There’s certainly some R&D involved. However, the software is entirely pirated from what I understand, so that’s a lot of money you save.
parliament32 6y ago
You're missing Cisco's margins from the gain. Cisco is taking an easy 50-70% markup above base hardware costs... That switch is $2.5k USD "new". Even if it costs you $300 for parts and a bunch of hours you're still making a ridiculous amount of money.
SteveNuts 6y ago
Like the article states, Cisco does sell at a major premium, so as long as you undercut that, you can make money.
ocdtrekkie 6y ago
Cisco basically sells software that only runs on their hardware. Slight exaggeration, but the reason old Cisco switches and routers are dirt cheap online is because it's usually a license violation to use them. The software on a Cisco device is licensed to the person or company who purchases it from Cisco or an authorized Cisco partner, and it's non-transferrable. (Also, you can't get software updates unless you have an active support contract or can identify a specific vulnerability and prove that you were the original purchaser of the unit in question in a support TAC.) Which means if you buy an aftermarket Cisco device, you're pirating the software on it unless you go through Cisco's pricey relicensing process... which mostly makes it cost you as much as buying a brand new device anyways. Obviously, homelab folks and test lab folks don't care too much, and Cisco doesn't mind them, but enterprises can't use used Cisco hardware. As such, counterfeit Cisco hardware makes sense: It's basically software piracy, but they have to provide hardware that'll trick it into running.
- mprovost 6y ago
  Licensing agreements like this always make me wonder how companies are supposed to handle the accounting for depreciation on hardware. Since the license isn't transferable, the effective resale value of the expensive hardware you just bought is zero as soon as you open the box.
  - ocdtrekkie 6y ago
    I think Cisco's in-house refurbishment center might be an option, it's the only way you can legitimately buy used Cisco hardware. (I also feel like we should give a shoutout to HP/Aruba in this thread. No support contract needed, they straight-up warranty and support most of their network hardware for like 100 years.)
    - pnutjam 6y ago
      I believe the have "advanced replacement" where they will cross ship warrantied items instead of waiting until they receive the bad one to send the good one. However, I think that ends at the EOL of the item. Usually when they stop manufacturing it.
    - kazen44 6y ago
      Mind you aruba is not in the same playing field as cisco. These conveluted license schemes are mainly designed for the higher end datacenter and connectivity hardware. (And with that hardware comes support). It's the same reason optics are whitelisted (how bullshittish that might be). If you are a datacenter or L1 IXP, spending a couple of grand on licenses is nothing compared to the cost of running the rest of the infrastructure. Not to mention you need the support when shit really hit's the fan. My experience with aruba's support has been lackluster, while both cisco and juniper offer excellent support in my experience. (at a cost ofcourse).
  - PeterisP 6y ago
    Accounting depreciation for assets is not directly related to resale value. Depreciation is intended to be an allocation of the purchase price across the whole expected usefulness term of that asset, it reflects the notion that in this year you "used up" some portion of an asset that will last for more years, so it makes sense to allocate just a part of the total cost to this year's cost of doing business. The intended purpose of that asset is to serve your business, not to resell it, so the fact that nobody would would buy that asset does not matter.
blululu 6y ago
It can be complicated. When you are sourcing parts in bulk for manufacturing the price needs to be negotiated through a personal relationship. It could be the case that the vendors making parts for Cisco do not want to endanger their existing business relationship and will not sell (or insist on a heft markup), it could also be the case that the counterfeiters have better connections with a different supplier who is willing to give them a better unit price (large corporations can typically negotiate a better unit price since they can guarantee larger and more consistent volumes). There are a lot of potential reasons why you might want to swap a component.

fuzzy2 6y ago

There’s certainly some R&D involved. However, the software is entirely pirated from what I understand, so that’s a lot of money you save.

parliament32 6y ago

You're missing Cisco's margins from the gain. Cisco is taking an easy 50-70% markup above base hardware costs... That switch is $2.5k USD "new". Even if it costs you $300 for parts and a bunch of hours you're still making a ridiculous amount of money.

SteveNuts 6y ago

Like the article states, Cisco does sell at a major premium, so as long as you undercut that, you can make money.

ocdtrekkie 6y ago

Cisco basically sells software that only runs on their hardware. Slight exaggeration, but the reason old Cisco switches and routers are dirt cheap online is because it's usually a license violation to use them. The software on a Cisco device is licensed to the person or company who purchases it from Cisco or an authorized Cisco partner, and it's non-transferrable. (Also, you can't get software updates unless you have an active support contract or can identify a specific vulnerability and prove that you were the original purchaser of the unit in question in a support TAC.) Which means if you buy an aftermarket Cisco device, you're pirating the software on it unless you go through Cisco's pricey relicensing process... which mostly makes it cost you as much as buying a brand new device anyways. Obviously, homelab folks and test lab folks don't care too much, and Cisco doesn't mind them, but enterprises can't use used Cisco hardware. As such, counterfeit Cisco hardware makes sense: It's basically software piracy, but they have to provide hardware that'll trick it into running.

mprovost 6y ago
Licensing agreements like this always make me wonder how companies are supposed to handle the accounting for depreciation on hardware. Since the license isn't transferable, the effective resale value of the expensive hardware you just bought is zero as soon as you open the box.
- ocdtrekkie 6y ago
  I think Cisco's in-house refurbishment center might be an option, it's the only way you can legitimately buy used Cisco hardware. (I also feel like we should give a shoutout to HP/Aruba in this thread. No support contract needed, they straight-up warranty and support most of their network hardware for like 100 years.)
  - pnutjam 6y ago
    I believe the have "advanced replacement" where they will cross ship warrantied items instead of waiting until they receive the bad one to send the good one. However, I think that ends at the EOL of the item. Usually when they stop manufacturing it.
  - kazen44 6y ago
    Mind you aruba is not in the same playing field as cisco. These conveluted license schemes are mainly designed for the higher end datacenter and connectivity hardware. (And with that hardware comes support). It's the same reason optics are whitelisted (how bullshittish that might be). If you are a datacenter or L1 IXP, spending a couple of grand on licenses is nothing compared to the cost of running the rest of the infrastructure. Not to mention you need the support when shit really hit's the fan. My experience with aruba's support has been lackluster, while both cisco and juniper offer excellent support in my experience. (at a cost ofcourse).
- PeterisP 6y ago
  Accounting depreciation for assets is not directly related to resale value. Depreciation is intended to be an allocation of the purchase price across the whole expected usefulness term of that asset, it reflects the notion that in this year you "used up" some portion of an asset that will last for more years, so it makes sense to allocate just a part of the total cost to this year's cost of doing business. The intended purpose of that asset is to serve your business, not to resell it, so the fact that nobody would would buy that asset does not matter.

blululu 6y ago

It can be complicated. When you are sourcing parts in bulk for manufacturing the price needs to be negotiated through a personal relationship. It could be the case that the vendors making parts for Cisco do not want to endanger their existing business relationship and will not sell (or insist on a heft markup), it could also be the case that the counterfeiters have better connections with a different supplier who is willing to give them a better unit price (large corporations can typically negotiate a better unit price since they can guarantee larger and more consistent volumes). There are a lot of potential reasons why you might want to swap a component.