Keep counterfeit products out of your IT shop

Counterfeit goods have popped up in the channel and could be in your organisation. Could you spot them before they cause problems?


Subnets began dropping off the MortgageIT network one after another. Entire bank branches went off-line for days as Joe Bruner, network engineering manager there at the time, scrambled to purchase and install replacement parts.

At first, he figured some of the new WAN interface cards (WIC) he recently installed to upgrade 50 Cisco 2811 routers during expansion and reorganisation were faulty. But as more routers failed and dropped off the network, Bruner realised he was dealing with fakes.

Thirty cards turned out to be counterfeit, he says. Despite repeated calls and e-mails to his supplier, Atec Group, the issue was not resolved.

Nor did he get an answer to the most important question: How did a registered Cisco reseller (also a platinum Network Appliance partner and gold partner to Microsoft and Symantec) acquire the counterfeit WICs in the first place?

What he didn't know was that phoney network equipment had been quietly creeping into sales and distribution channels since early 2004, when manufacturers began seeing more returns, faster mean-time between failures and higher failure rates, says Nick Tidd, vice president of North American channels for 3Com and president of the Alliance for Gray Market and Counterfeit Abatement (AGMA).

Counterfeit gear has become a big problem that could put networks - and health and safety - at risk. "Nobody wants to say they've got counterfeit gear inside their enterprises that can all of a sudden stop working. But it's all over the place, just like pirated software is everywhere," says Sharon Mills, director of IT procurement organisation Caucus.

10 percent counterfeit suspected

There are no statistics specific to network hardware counterfeit rates. But according to a white paper by AGMA and consulting company KPMG, counterfeit products account for nearly 10 percent of the overall IT products market.

"That's $100 billion in fake memory sticks, drives, monitors, networking gear and other IT products floating around out there in black and grey market channels. This has huge implications for the enterprise," says Tidd, who became involved in his first counterfeit case in 2001. That case led him to a Canadian reseller who also was under investigation by HP. Out of that case, 3Com and HP, along with Cisco and Nortel, founded AGMA.

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