Btw, thanks for the link! I suspect more than a few 6500 linecards that I've seen die in years past were due to something similar, as opposed to what we'd previously assumed to be the root cause - either damage in transit or "cosmic rays" ;)
It's very odd that "grey market" equipment is considered the standard way to refer to genuine Cisco equipment when sold by a company other than a Cisco partner. I understand keeping out counterfeits, but given the first-sale doctrine, how is a resold piece of equipment anything other than completely legitimate?
If you think about it, and get past the "it's just industry standard" mentality, it's generally insane the way that Cisco uses these pseudo-monopoly tactics. In the old days, say with maintenance on IBM Selectric typewriters, such schemes were called "bundling" and "tying," and the DOJ would pursue the companies for anti-trust violations.
Now, the DOJ arrests people based upon nebulous complaints from Cisco's general counsel. See e.g. http://abovethelaw.com/2011/07/sue-a-giant-corporation-get-r... wherein a British citizen was arrested in Canada for starting a company that competed with Cisco maintenance.
The Canadian court quashed the request for extradition after the DOJ's request trapped him in a foreign country for years. He remains under indictment here, despite the Canadian judge stating that the DOJ's case was a fairly transparent copy of Cisco's civil suit. The ruling was incendiary, stating that The extradition process to bring the applicant before United States Courts… involved innuendo, half truths and complete falsehoods.
The judge concluded:
The only reasonable inference I can draw from the facts is that the criminal process was used to pressure (unsuccessfully) the applicant into abandoning his antitrust suit against Cisco…. Any well-informed person acquainted with the truth would conclude that the collective result of the mistreatment of Mr. Adekeye offended fundamental notions of justice.
Now, there are court-recognized exceptions to this rule in various circuit courts (most significantly by the 9th Circuit in Vernor v. Autodesk, SCOTUS cert denied) for digital goods under the so-called "shrink-warp licensing" exception. [1]
So given that the highest court has allowed the ruling to stand in a large circuit, yet has consistently expanded the first-sale doctrine for four decades [2], the precedent is unclear.
Cisco does rely on Vernor and its progeny as it's justification for blacklisting resold items. But that argument is unlikely to hold water outside of the software-laden 9th Circuit.
The question, stated in layman's terms, is, "To which is a Cisco router or switch more similar, a copy of Windows or an iPod?" This is an open question from a legal standpoint, and thus we must unfortunately resort to that most unreliable of legal tools: reason.
Both options are almost equally unpalatable to the Supreme Court for policy reasons. Expand the shrink-wrap exception to cover Cisco and you risk encompassing all products that contain firmware, from TVs to microwaves, and thus strangling the half-trillion dollar secondary sale market for electronic goods. Keep the exception narrow and you choke off the single largest source of revenue (all told, including gains from new purchases, maintenance contracts, and paid software updates close to $20 Billion, or 40% of annual revenue) to the government's largest IT hardware provider (over 85% of DoD in particular), leaving the government stranded with vast networks of legacy Cisco hardware with little to no new development from the company.
The existing legal precedent creates a tough needle for the Court to thread. As a result, we have the current state of limbo, and thus discussion of "grey markets," which are neither clearly legal nor clearly illegal.
[0] https://en.wikipedia.org/wiki/First-sale_doctrine [1] https://en.wikipedia.org/wiki/Vernor_v._Autodesk,_Inc. [2] Most recently in Kirtsaeng v. John Wiley & Sons, Inc., No. 11-697 (U.S. Mar. 19, 2013)
>leaving the government stranded with vast networks of legacy Cisco hardware with little to no new development from the company.
Do we have reason to believe this is true? If resale was allowed, do we believe network hardware companies would just shrivel up? How do we square this with the facts of many platforms being intentionally crippled for marketing reasons? Or does that not happen on top-end platforms?
Network hardware companies in general wouldn't suffer, but Cisco's increasing reliance upon support, service, and firmware for revenue means that unrestricted resale would bite into Cisco's revenue hard, perhaps 25-50%.
Right now Cisco hardware powers the most critical government information systems, including military and financial communications (over 85% of the gear is Cisco.) Since many of these networks use Cisco proprietary functions, have scores of personnel trained on Cisco gear, and relationships with networks of Cisco suppliers, transition to another hardware manufacturer would be both expensive and difficult, at a time when the government has little funding for new initiatives.
Since the government needs Cisco to be a smoothly functioning company to meet critical information needs, it makes sense that they maintain tight relations.