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Cisco faces controversy over 'forced obsolescence'

VARs and customers gripe about Cisco Systems' end-of-life policies and perceived 'forklift' upgrades to new technologies.

As Cisco pushes into unified communications and other new age initiatives, it is ending support on more of its traditional gear, and that has caused an uproar.

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In June, Cisco Systems Inc. execs told an assembly of the company's partners that a whopping $9 billion worth of Cisco gear will hit end of life this fiscal year starting August 1.

This was positioned as a massive partner opportunity both for hardware sales and integration work. But it's also a major headache for customers that are unhappy about what they see as forced upgrades. In short, no one ever wants to do forklift technology changeovers, and especially not during a back-breaking recession.

In many cases VARs take the heat for customer angst. This year's EOL list from Cisco is 21 pages long and includes everything from bread-and-butter routers, VPN software and PIX firewalls to various versions of the Cisco IOS software.

To be fair, the company gives six months notice when it plans to stop selling a product. Users can call an assistance center for up to five years from the end-of-sale date for hardware and operating systems and three years for application software. Replacement parts are available for five years after the end-of-sale date.

A Cisco insider said that while the perception may be that the EOL list is longer than ever, the number of product IDs listed is actually down year over year. But that is certainly not the impression in the field.

End of life policies spark comparison shopping
The CTO of a large financial services company said a lot of his company's Cisco gear is coming off support now. "All that means in practice is that you can't get SmartNet support for the box. There is a pretty good second tier of support available if you want to run old Cisco gear, although it's a pain to manage two support contracts. In most cases it's cheaper and easier just to replace the older gear with new models," he said.

But for smaller companies, the option of throwing out old but functioning gear for newer models with more bells and whistles raises hackles. And this CTO said he is intrigued by Hewlett-Packard's ProCurve products. "They're half the price and come with a lifetime warranty. I haven't gone there yet, but I'm tempted," he said.

In some ways, Cisco is the victim of its own success -- its hardware holds up well over time. Several Cisco VARs said the vendor is trying to force the upgrade issue in order to sell more of its new-fangled unified communications and other gear.

"To get the benefits of that initiative, you have to replace everything," said one West Coast Cisco integration partner. "It's a tough sell since they're now positioning themselves as a platform, where to date they had been positioned as a modular hardware vendor. Now look at their service acquisitions -- WebEx, TelePresence and others -- and you have a very confused customer base."

Another Cisco VAR put it bluntly: "This is forced obsolescence."

But while VARs may feel some heat, Cisco may ultimately feel it more. Several Cisco partners said one reason for Juniper Networks' ascension is its more flexible support policies, and HP is looking increasingly attractive to many VARs and customers alike.

The West Coast integration partner said the EOL cycle seems more pronounced now because the gear being retired is more widely used than in the past. "The 65XX series chassis has been around for awhile and is a great example…. It does great for 95% of routing needs but doesn't support new stateless 10 GB interfaces like Nexus," he said. The newer Cisco Nexus hardware is typically two to three times more expensive than the gear it replaces, he added.

Cisco pitches its end-of-life migrations as modular "upsell" opportunities, he said, "but the minute you look under the covers, it's a forklift upgrade and not a cheap one … [and for] any company it doesn't make sense to disparage your old product for the new line without providing a cohesive migration path."

In addition, Cisco's 10g gear is very pricey relative to rival offerings and that is a factor in enterprise accounts, said Jason Sparks, vice president of storage and systems for Xiologix, Tualatin, Ore. Citrix partner.

The perception that Cisco's new gear is pricey and that still-working older gear is coming off life support is not good for Cisco, which faces tougher competition from HP and Juniper Networks in its core business. That Cisco is now taking on HP with its data center server as well could mean even more intense competition. Cisco and HP had battled it out in networking hardware but also partnered in many other areas. Now there is no doubt they will be more directly competitive across the board with their battles spilling over into the partner community.

Cisco's end-of-life policies take their toll
Some Cisco partners said the company has always been heavy handed with end-of-life issues and that has helped Juniper Networks and HP's ProCurve business, which are both more flexible in their policies.

Cisco maintains that it has been open and above board about its end-of-life and support policies, having standardized on a company-wide end-of-life strategy in 2002.

"Since then we have been consistent, open and transparent with our customers and partners about our end-of-life policy," Brian Jeffries, Cisco Services' vice president of global field operations, said via email.

But some partners aren't buying that.

"From a customer perspective, the issue is they have a router that works fine, and it's end of lifed and they can't get an OS refresh because Cisco wants them to buy a whole new router," said Luke Wignall, managing partner of Denver-based Common Knowledge Technology LLC.

Cisco has its defenders. Some VARs said the company is doing what it has to and even blamed other Cisco VARs for not paying enough attention to product roadmaps and timelines.

"A corporation has every right to manage its own brand, product line, distribution and cost. What often happens is a partner doesn't want to go back to a client and explain this, especially if they recently sold them a box and now have to explain why they need to replace it," said Kevin McDonald, executive vice president of Alvaka Networks, a Huntington Beach, Calif., solutions provider.

"Xiologics' Sparks agreed: "A lot of complaints come around the chassis and the 6500s and, honestly, I don't get the gripe. That chassis has been around for 14 years and was completely backward compatible for most of that time -- what do they expect? Now if Cisco has suddenly accelerated its end-of-life policies, that's a different matter," he said..

Alternative distribution channel concerns
Still, the fact that disgruntled customers may end up going to eBay to buy older Cisco gear for replacement parts and software is another issue Cisco faces.

One Midwest partner said Cisco's policies has led customers to dump working gear into the gray market to recoup some money and that other companies do their shopping there for replacement parts and software.

"Given the cost of a Cisco Catalyst switch, if I'm a gutted and hamstrung midsized business right now, thanks to the economy, and my choice is to spend $800 for an EOL'd switch in a manufacturer's sealed box on eBay versus paying $2,200 for one from a reseller, guess what I'd do?" he said.

The fact is, users who want to prolong the lives of EOL'd gear may do so by buying off the gray market and scavenging parts and software disks.

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