Being able to buy grey market goods from unofficial importers often results in much lower prices. We know it's a viable route for buying everything from phones to software, but how does it play out when you're looking at more complex gear like enterprise networking equipment?
The issue was discussed by Les Williamson, ANZ and AP VP for Cisco, during a media briefing today at the Cisco Live customer conference in Melbourne. Williamson acknowledged both that there was a grey market for Cisco's networking equipment and that the company's ability to respond to those "unauthorised" channels of distribution was limited:
We have rules and regulations around how our channel buy our equipment. We'll take up any legal action that we need to to if we see breaches of the contracts, trading agreements or partner agreements. But we don't control grey marketing per se, because we can't. I have to respect my customers' right to play in the online world. I dont like it and I try and reinforce our values as much as I can, but it's become fairly easy to buy high-end networking components.
The main incentive for grey market purchases is cost. Cisco partly addresses that by running a scheme selling refurbished gear at lower prices, but beyond that the main argument is that support can be a problem. "The customers who are consuming that face a certain level of risk, because support contracts are null and void," Williamson said. Similar arguments are often made for mass-market consumer products, but they're slightly more convincing when you're dealing with business networking gear that might be used by hundreds of people.
Would you be happy to purchase "unsupported" networking infrastructure if the price was much lower? Share your thoughts in the comments.
Disclosure: Angus Kidman visited Melbourne as a guest of Cisco.