Illicit hardware Neil Ichiki 14 July 07

Agenda Quick background Overview of the global counterfeit market Illicit products defined & how to protect yourself Concerns Examples

Global Counterfeit Market The World Customs Organization estimates that international trade of counterfeit products exceeds six percent of global trade Specific to the IT industry, KPMG found that approximately 1 in 10 IT products sold worldwide is counterfeit, costing global technology companies as much as $100 billion in lost revenue annually.

Illicit Hardware Defined Grey Market –Ebay –Companies that upgrade their network and no longer need old equipment

How to Protect Yourself Against Grey Market Buy products through authorized OEM sources only Understand the authorized pricing discount levels High-end (restricted) product is offered to an end user by an entity that is not entitled to purchase that product through authorized OEM channels. Communication with the OEM reps

Counterfeit Products Definition –HW, SW or Documentation to which an OEM trademark/logo has been affixed w/ out proper consent from the OEM How to Protect Yourself –Offered at a much greater discount than genuine products –performance and appearance are inconsistent when compared to similar, genuine products

3 rd Party Products Components, typically memory, cables, or gigabit interface converters (GBICs), manufactured by a company other than the OEM. They are only illegal if they display counterfeit OEM labeling or trademarks. Product advertised as “OEM Approved” Product was sourced through contract manufacturer rather than from OEM

Concerns Increased risk to your network Products purchased through unauthorized channels may not be entitled to warranty & service support SW licenses on grey market equip do not transfer, exposing resellers and customers to software licensing issues, including paying for a software re-license