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Hardware

Hardware Manufacturers Gouging Customers 364

Posted by michael from the just-say-no dept.
rahlquist writes "An article over at infoworld discusses that buying that used router on ebay may not be a good deal if Cisco can find its way to screwing you. What's next, buy a used Ford and pay Ford to transfer the license for the onboard computer's OS or face piracy charges if you continue to drive?"
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Hardware Manufacturers Gouging Customers More

Hardware Manufacturers Gouging Customers

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  • Good news, bad news re: Cisco (Score:5, Interesting)

    by numbski ( 515011 ) * <numbskiNO@SPAMhksilver.net> on Saturday August 09, 2003 @04:52PM (#6656456) Homepage Journal
    The good news is that there is an excellent replacement: Microtik [microtik.com].

    The bad news is that they are violating the gpl. :( I even submitted a /. article that is still pending after 2 days trying to deal with this. I need to recompile the kernel on one of the units I bought from them, but they won't release the kernel sources to me. *sigh*

    • Re:Good news, bad news re: Cisco (Score:5, Interesting)

      by ShieldW0lf ( 601553 ) on Saturday August 09, 2003 @04:57PM (#6656484) Journal
      What's next, buy a used Ford and pay Ford to transfer the license for the onboard computer's OS or face piracy charges if you continue to drive?"

      That would be awesome... I can't think of a better turn of events to bring the issue to the common man than to have copyright laws prohibit buying and selling cars. We need to suggest this to the big automotive companies.

      • >I can't think of a better turn of events to bring
        >the issue to the common man than to have
        >copyright laws prohibit buying and selling cars

        Huh? What does copyright laws have to do with that? Copyright laws doesn't prevent you from selling, say, a book you bought or anything else just becayse there is something that has a copyright "in" it. Copyright laws deals with making copies , doing public performace and such.

        What is the issue is contract laws and any special contract you may have done at the

        • Re:Good news, bad news re: Cisco (Score:5, Funny)

          by Fat Casper ( 260409 ) on Saturday August 09, 2003 @09:51PM (#6657540) Homepage
          Huh? What does copyright laws have to do with that? Copyright laws doesn't prevent you from selling, say, a book you bought or anything else just becayse there is something that has a copyright "in" it. Copyright laws deals with making copies , doing public performace and such.

          What is the issue is contract laws and any special contract you may have done at the same time you purchased something but again, that has nothing to do with copyright laws.

          That's a nice used car you just bought, but I don't believe that you have a legitimate license to use the software in the PCM. Just you wait until the traffic cop down the road realizes that he's stopped a pirate.

          • You seem to be under the common illusion that you NEED a "legitimate license" to use software, or to even possess it. Quick refresher course in copyright law: These [cornell.edu] are the only rights reserved for the copyright holder. HAVING a copy of a work is not on the list. USING a copy of a work is not on the list.
            And, if you will check out Section 109 [cornell.edu] youll see that whoever owns the copy is allowed to sell it.

    • Re:Good news, bad news re: Cisco (Score:5, Interesting)

      by cduffy ( 652 ) <charles+slashdot@dyfis.net> on Saturday August 09, 2003 @05:01PM (#6656522)
      The bad news is that they are violating the gpl. :( I even submitted a /. article that is still pending after 2 days trying to deal with this. I need to recompile the kernel on one of the units I bought from them, but they won't release the kernel sources to me. *sigh*

      Have any code in the kernel? Have any friends that do? (One of my roommates does, but he's busy enough as it is).

      All you need is a kernel contributer whose code they're failing to redistribute to send them a warning and (if they don't respond) file a lawsuit against them. Ask for an injunction against their distribution of the infringing product, and they'll settle (presuming you ask something reasonable... say, the court costs you've incurred + release of the source) right quick.
    • What, specifically, did they tell you? Are they just ignoring you or did they explicitly say they won't give you the source? Just make sure you document all communication with them. Perhaps even host it to the internet. :) Additionally, if you have a lawyer friend (as all good OSS geeks should have ;) see if you can get him/her to draft a nasty legalese letter to them...

  • What's the point? (Score:5, Interesting)

    by Fishead ( 658061 ) on Saturday August 09, 2003 @04:52PM (#6656457)
    At the rate that hardware becomes outdated, what benifit do they think they would have screwing their customers out of trying to recoup some of their costs?

    Not to mention that every time I sell old hardware, it is for the express purpose of purchasing new hardware. Everyone wins.

    • Re:What's the point? (Score:4, Insightful)

      by numbski ( 515011 ) * <numbskiNO@SPAMhksilver.net> on Saturday August 09, 2003 @04:55PM (#6656470) Homepage Journal
      Agreed. The stupidity seems to be endless. Granted, I run a relatively small network provisioning firm, but I'm very tempted to root out all Cisco equipment and replace it with alternatives that utilize open standards.

      EIGRP may be an excellent protocol, likely better than OSPF, but for my money, OSPF is my choice because it doesn't lock me down to a vendor.

    • Errr no (Score:5, Insightful)

      by Archfeld ( 6757 ) * <treboreel@live.com> on Saturday August 09, 2003 @05:08PM (#6656555) Journal
      If you sell your used hardware to someone, then from the corporate viewpoint, YOU are depriving them of their right to sell NEW hardware to that person, hence you are infringing on the rights of a corporation !?! Lordie this country is hosed in the head....

      • Re:Errr no (Score:4, Interesting)

        by Pofy ( 471469 ) on Saturday August 09, 2003 @08:21PM (#6657282)
        >If you sell your used hardware to someone, then
        >from the corporate viewpoint, YOU are depriving
        >them of their right to sell NEW hardware to that
        >person

        Ehh, yes, that is what RIAA and other "content providers" call theft isn't it (and all others that think copyrigth infringement equals theft). That is, you deprive them of a possible income, hence they lose something and it is theft. SO I guess soon they will argue second hand shops are actuall big illegal thievery shops. Sigh.

    • Re:What's the point? (Score:5, Insightful)

      by Valar ( 167606 ) on Saturday August 09, 2003 @05:10PM (#6656560)
      The point is, they want to encourage these eBay bargain shoppers to buy new stuff (curtailing the secondary market). As a result outdated hardware would just be tossed, because no one would want it (it would cost less to buy it new!). They are hoping that everyone will continue to buy all new hardware, and no one will be interested in used gear anymore. I suspect, however, that a large portion of the customers they hope to gain from this simply won't buy anything, because they won't be able/willing to fork over the cash for it.

    • Re:What's the point? (Score:5, Insightful)

      by gaijin99 ( 143693 ) on Saturday August 09, 2003 @05:17PM (#6656590) Journal
      what benifit do they think they would have screwing their customers out of trying to recoup some of their costs?

      Some managerial types have some very odd ideas about money. I knew a person who ran a motel back in the 1980's. He was charging $50/room in an area where the standard price was around $40/room. Needless to say he didn't rent very many rooms. A friend of mine was his accountant, and he suggested that the motel owner drop his prices to rent out more rooms. Mr. Idiot was horrified at the idea: "If I did that, I'd be loosing $10 on ever room I rented!" Apparently he had the fixed idea that when a room was rented he somehow deserved $50, so it was preferable to him to rent very few rooms at a higher price than to rent more rooms at a somewhat lower price. Eventually he went out of business.

      Doubtless the same sort of idiocy is going on here.

      The hardware manufacturers have always hated sale of used hardware. Using software licensing this way is just a club to try and smash the used hardware market, it has nothing to do with them worrying about their precious little software license being violated. One copy of software was bought, one copy of software exists. In this situation they have been paid for every copy of the software being used; no piracy is taking place. The entire "You bought a software license from us, and you can't sell that" line is total tripe. It may be legal, but it damn sure isn't right. The law needs to be changed to prohibit that sort of crap.

      • Re:What's the point? (Score:5, Funny)

        by Grishnakh ( 216268 ) on Saturday August 09, 2003 @05:39PM (#6656687)
        The thing is, the market should be sorting this out. Just like the idiot motel-owner went out of business because of his high prices and stupidity, these companies should do the same. Cisco and NetApp don't have monopolies; their competitors should be able to out-compete them on this point. If customers are too stupid to go with customer-friendly vendors when the option exists, then those customers deserve to lose their money. What needs to happen is what's currently happening: this issue needs to gain visibility (like with this article) so that customers will be informed and no longer buy equipment from these companies, since they can count on the resale value to be nil.

        I know I'd never buy a car that I couldn't resell later, and had to just throw away.

        • Re:What's the point? (Score:5, Insightful)

          by Alsee ( 515537 ) on Saturday August 09, 2003 @06:40PM (#6656896) Homepage
          The thing is, the market should be sorting this out.

          When it comes to bad business practices in general, yes. But the fundamental problem here is that the law is not being applied properly. When the law itself is wrong then it is not a market issue, the law needs to be fixed. In general "free market forces" cannot fix legal problems.

          There is a legal doctrine called "Right of First Sale".

          US CODE COLLECTION: TITLE 17 CHAPTER 1 Sec. 109 [warwick.ac.uk]
          the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

          If you buy a book you have a legally guaranteed right to sell that book. That is why used book stores are legal. The same goes for CD's, video tapes, DVD, computer games, paintings, sculptures, poetry, cassettes, EVERYTHING.

          You bought one copy you have the right to have a garage sale and sell that one copy. Once the copyright holder has created and sold that copy he has made his profit and has no further claim upon that particular copy. It may be transfered freely.

          The problem here is that they are playing games with the word "owner". It is intened to cover anyone who pays for the legal possession of that copy. They are claiming that you are not the owner of that copy.

          There have been bills floating around congress to correct this and other related poblems by changing occurrences of "owner" to "rightful possessor". Unfortunately it hasn't gone through yet.

          Another thing, as far as I can tell this "licencing scheme" isn't actually legal anyway, though I know that the courts have been treating them as legitimate. Copyright holders can ONLY licence the right to make copies, the right to distribute copies, and teh right to public performance. If they don't grant you one or more of these rights then NO LICENCE EXISTS. Nor does a contract exist unless they offer something of value and you INTENTIONALLY CHOOSE to accept that offer. You are never bound by any contract that you have not chosen to be bound by.

          Once they sell you a disk or any other medium with the software on it the law already SPECIFICLY grants you the right [warwick.ac.uk] to install and run that software. You are perfectly free to reject the licence and install/use the software anyway so long as you are willing to pass on anything else they may offer in the licence.

          Anyone who rejects my argument about linces can ignore all of that and just go back to what I said earlier about the bill floating around congress to fix the law by changing occurrences of "owner" to "rightful possessor". I don't know why it hasn't passed yet. Probably meddling from the copyright lobby.

          -

    • Selling used routers (Score:5, Insightful)

      by billstewart ( 78916 ) on Saturday August 09, 2003 @05:54PM (#6656744) Journal
      Routers don't become outdated the way that PCs do. A 5-year-old Cisco 2500 won't do as many things as a new 26xx, and won't have enough memory to run some of the newer operating systems releases, but if all you're doing is connecting your LAN to an ISP T1 connection and some dial backup, it's just fine.

      This isn't like Gamer PCs, where you _need_ a 4.77 GHz machine to keep up, or a Microsoft Office machine, where MS keeps making Office bigger and using the newer features of Windows, so you need to upgrade Windows, but you can't upgrade to Windows 2006 without upgrading to at least a 2GHz machine with 6.40GB of RAM. This is much more like the 486 Linux machine sitting in the corner acting as a DNS and DHCP server, or the Pentium 133 you're using as an X terminal.

      But there are two popular reasons to sell a used router. One is that you're upgrading to a bigger router, and as you say, everyone wins including the router vendor. The other reason is that your dot-com died (or was bought by somebody who already had enough bandwidth in their offices) and you're selling the routers, the PCs, the chairs, the cubicle walls, and the t-shirts, and nobody's buying any new router except your happy E-Bay customer, and the router vendor loses a sale they might have gotten.

      • ...there's plenty of other vendors out there who can sell you a solution for less. So why put up with the used Cisco... because of the name? Is that supposed to warrant that huge markup? They're not putting their best foot forward if that's the way they treat their (potential) customer base. They should do like Sun and offer a TRADE IN for a new model instead. Then they could cannabilze that unit for parts for existing customer.

        There's not much use trying to shove Linux on a 486 when you can spend $200 and

    • Doing Something (Score:3, Informative)

      by _Sprocket_ ( 42527 )
      The dot-bomb burst was especially nasty for Cisco. Sure, it was the beginning of an economic slump. And that meant customers were more likely to hold on to their funds "just in case" than shell out for networking gear - even if they could afford too. But it went further than that.

      All these failed dot-coms meant there was a very large supply of premium Cisco network kit available for pennies on the dollar. Sales of this used gear directly competed against new sales. Not only was Cisco facing customers

  • Hrmmm (Score:3, Interesting)

    by Repugnant_Shit ( 263651 ) on Saturday August 09, 2003 @04:54PM (#6656463)
    So a NetApp storage system is two separate pieces, the hardware and the software. If I decide to sell my old NetApp, does this mean I can sell the hardware to someone, and the software to someone else? That doesn't sound like something that NetApp would like.
    • If I decide to sell my old NetApp, does this mean I can sell the hardware to someone, and the software to someone else?

      Looks like, under the license agreement of the software, you cannot resell it to anyone at all. The only exception is from the article, in the case of mergers/acquisitions, etc, when all the assets of one company go to another.

    • Re:Hrmmm (Score:5, Informative)

      by the eric conspiracy ( 20178 ) on Saturday August 09, 2003 @04:58PM (#6656490)
      does this mean I can sell the hardware to someone, and the software to someone else?

      It means you can't sell the software at all. You don't own it, and the license is not transferable.

      • Re:Hrmmm (Score:4, Interesting)

        by Shishak ( 12540 ) on Saturday August 09, 2003 @06:31PM (#6656861) Homepage
        So if I buy a brand new NetApp with hardware and software. Later I sell the hardware but maintain the software license. Can I later buy new NetApp hardware to run my software license on? Of course you can't; Software licenses are a consumable. They last as long as you own the hardware. Once you sell the hardware the software license is gone *poof*

        Doesn't seem right. I have a NetApp F720 that is getting a bit old and needs replacement. I've contact NetApp about a trade-in/upgrade. They want to resell the same software I already have on my existing filer. I've decided to go with External SCSI RAID (Adaptec), Fiber Channel HBAs, Linux, LVM and ReiserFS 4.0. I can probably get 80% of the performance for 10% of the cost. I'll buy two and get 200% of the redundancy for 20% of the cost...
    • No. The article says that these licenses are specifying that they cannot be transferred. You can transfer the hardware because of the principle of first purchase (the idea that once you buy the physical object you can do with it as you please, like with books). The software license is still a license, and as much as it sucks, it came with an EULA. The seller had a responsibility to abide by the terms of the EULA but didn't, and now the buyer is screwed into buying a $15,000 license for support of the ha
      • he article says that these licenses are specifying that they cannot be transferred. You can transfer the hardware because of the principle of first purchase (the idea that once you buy the physical object you can do with it as you please, like with books). The software license is still a license, and as much as it sucks, it came with an EULA.

        Does that mean, since the software is non-transferable, that you retain the software license? As one who already holds a license for the software, can you then buy a

      • You can transfer the hardware because of the principle of first purchase (the idea that once you buy the physical object you can do with it as you please, like with books).

        But the software is a "physical object".
        It is a pattern of magnetic domains on a hard disk, or pits on a CD-ROM.
        Why is that any less physical than the rest of the hardware?

        Now, some may argue that "software" is different because it can more easily be copied than the rest of the hardware.
        Here is a thought experiment:
        If tomorrow, someone

      • Re:Hrmmm (Score:4, Insightful)

        by dougmc ( 70836 ) <dougmc+slashdot@frenzied.us> on Saturday August 09, 2003 @06:20PM (#6656821) Homepage
        the NetApp guy claims in the article that $15k is about a quarter what the guy would have paid for a new one through them
        That's *not* what the article said. What it said is this --
        "$15,000 is still a good deal," counters Frank Sowin, senior director of service marketing for NetApp of Sunnyvale, Calif., noting that the original price of the storage server was more than four times that.
        `Original price' ... I haven't priced these thingsl lately, but I suspect that they depreciate quickly just like all computer items. The new models may still cost $60k -- but they're probably much faster and have much more storage.

        I've got an SGI in the garage I bought for $40. Original price on that model was more like $6000. If SGI told me that I had to pay $1250 to relicense Irix for it, and tried to convince me that this was a bargain (after all, it's 75% off!), do you think I'd agree? Do you think I'd pay it?

        (Actually, I haven't touched the box in a year. I need to just get rid of it.)

    • Re:Hrmmm (Score:5, Insightful)

      by frovingslosh ( 582462 ) on Saturday August 09, 2003 @05:03PM (#6656529)
      So a NetApp storage system is two separate pieces, the hardware and the software. If I decide to sell my old NetApp, does this mean I can sell the hardware to someone, and the software to someone else? That doesn't sound like something that NetApp would like.

      More importantly, when you bought it (perhaps from someone like CDW) you bought the entire thing, there wasn't even an option to buy just the hardware. Now they want to claim they are two different parts???!!! That's completely bogus; if CDW can sell it to you then you can sell it to someone else. Also, if you did decide to sell the hardware and then sell the software to someone else, the legal principle known as Right of First Sale pretty much says that you indeed can sell the parts, even if NetApp doesn't like it.

  • don't give them any ideas (Score:4, Funny)

    by Anonymous Coward on Saturday August 09, 2003 @04:55PM (#6656473)
    What's next, buy a used Ford and pay Ford to transfer the license for the onboard computer's OS or face piracy charges if you continue to drive? don't give them any ideas
    • This should be no surprise to anyone. I recall (poorly) That MS doesnt allow (corporate licensers) you to even give away computers with windows on it. This is more of the same that 'you dont own anything, we are merely loaning it to you'

      Welcome to the software feudal system. be sure you give the bigger share to the lord of the manner.
  • Surely this is only a storm in a tea cup.
    For large companies who require the support contracts, they will not usually buy equipment on eBay, but through their corporate supplier.
    For smaller companies who would buy hardware second hand, they are the kind who can make do without supports contracts, and happily live in a legal "grey area".
    Although it is morally stingy on the company's part, I don't think it will do too much to normal people, who will just use it "illegally".
    • FREEZE! HANDS UP! This is the BSA! We know you have illegal routers. We are coming in, and want everyone to lie flat on the ground away from the routers. Comply and no one gets hurt.

      • Re:Big Corporations (Score:3, Insightful)

        by Arc04 ( 601196 )
        Surely you mean:

        FREEZE! HANDS UP! This is the BSA! We know you have illegal routers that you bought 100% legally. We are coming in, and want everyone to lie flat on the ground away from the routers. Comply and no one gets hurt (well financially everybody except us gets hurt).

        No?!?
  • Well, good thing all my used gear was lifted from busted dot-coms. ;P

  • New Concept (Score:5, Insightful)

    by Dachannien ( 617929 ) on Saturday August 09, 2003 @04:58PM (#6656496)
    Someone owns a whole bunch of Cisco routers or other miscellaneous equipment. Once the equipment is no longer needed, they retain the license to the software while selling the hardware to someone else. Cisco rep complains, new hardware owner says "talk to the software licensee". When purchasing maintenance agreements and such, the hardware owner pays off the software licensee the cost of the maintenance agreement plus a small surcharge, and the software licensee pays Cisco the amount on Cisco's price list for the maintenance agreement.

    The terms of the license agreement are fulfilled - it's just that the on-site location is changed.

  • E-Bay (Score:2)

    by rf0 ( 159958 )
    All of these people have bought stuff on E-Bay and are surprised when companies turn round and so no. I know it hard but if they went through a reseller then it would be all supported etc.

    The companies have no idea what state the hardware is in so if say a controller has gone they won't to make sure they are covered.

    On the software side however it is slightly different. I can understand them wanting you to pay some fee but prehaps not full price as a matter of good will. Then again as the old saying goes
    • All of these people have bought stuff on E-Bay and are surprised when companies turn round and so no. I know it hard but if they went through a reseller then it would be all supported etc.

      People have run into something similar when buying Sun gear - although Sun's license fees are "low" for single cpu systems. Basically the RTU only transfers if you buy the used gear from Sun or from an authorized Sun reseller.

      In the Solaris 8 days, the RTU was free for systems capable of holding less than 8 CPU's, bu

    • the guy wasn't asking for free maintenance though, he was trying to buy maintenance, and thats only half the point. the company was telling them that they couldn't even use their netapp, even though they had paid for it.

      look, so what if it was bought off ebay, why does that matter? the item was bought originally and both the hardware and software was paid for upfront and I don;t hink that netapp have any moral reason to ask for any money. they just want money for old rope. it's been sold, let it go for fuc

  • Reselling the same thing. (Score:4, Interesting)

    by mopslik ( 688435 ) on Saturday August 09, 2003 @04:59PM (#6656507)

    "$15,000 is still a good deal... If the ownership of a system changes, our contract says the software has to be relicensed."

    If I give up my ownership, do I get my $15K back? Something tells me no.

    • If I give up my ownership, do I get my $15K back? Something tells me no.

      Even though your software license is nontransferrable, non-reinstallable and nonrefundable, you still get to keep it. Your $15,000 keepsake will be yours to cherish forever.

      I suggest folding it up into a little square and putting it in a pendant. Give this to your wife as a gift. It cost about as much as a quality 2-carat diamond, and it has the same intrinsic value. She'll really appreciate this heirloom as a token of your affectio

  • Worst... policy... ever! (Score:4, Insightful)

    by bennomatic ( 691188 ) on Saturday August 09, 2003 @05:00PM (#6656511) Homepage
    This is amazing! Someone was just knocking on their door to pay them money for a maintenance agreement, and they shut the door on him. Had the original owners just thrown out the old equipment, they would not have gotten anything, and they certainly weren't refunding any licensing fees to the previous owners, so... ARGH!!! And that's just the first story!!!

    When companies get greedy like this, it's all I can do to keep my calm. I'm not sure I agree that all information wants to be free, but used sofware licenses that are bound to hardware that is changing hands sure do.

  • caveat emptor (Score:3, Insightful)

    by b17bmbr ( 608864 ) on Saturday August 09, 2003 @05:01PM (#6656518)
    hate to say it, but you gotta know what you're buying. both used and new. maybe it will awaken some eyes to open source/open standards, what have you, but if you buy something you need to know if you can resell it (as opposed to a leasing, or trading in with the manufacturer), if that is your plan.

    as a side note, my father worked for pitney bowes (they sell shipping,mailing, and postage systems) for many years. they did the same with their shipping systems and software. of course, most old PB systems got traded in for newer systems, there were few in the 2nd hand market. so it's not just in the IT world.

    • Re:caveat emptor (Score:4, Interesting)

      by fyonn ( 115426 ) <dave@fyonn.net> on Saturday August 09, 2003 @05:37PM (#6656681) Homepage
      caveat emptor is one thing, but this is really taking the piss. a netapp is not bespoke software, even though it might be expensive. I don't mind a company getting paid a fair price for their product but this kind of lark puts me off them in the first place.

      it's this kind of shit that got the doctorine of first sale pass for books

      dave
  • Hate to play devil's advocate but ohh well..

    This makes perfect sense for the hardware companies, when you buy a high end router, you aren't paying just for the box, the metal, and the wires, but also for the IOS, tha code might not have a pretty front end, or a nice little start button, but it is software that someone made and without it the box is useless. Software companies do this all the time, makes perfect business sense for hardware companies to do the same.

    • Re:Makes sense. (Score:3, Insightful)

      by jas79 ( 196511 )
      This makes perfect sense for the hardware companies, when you buy a high end router, you aren't paying just for the box, the metal, and the wires, but also for the IOS

      When you buy a Ford you don't just pay for the doors, the roof ,the wheels and the engine,but also for the software which controls the engine.
      So that does also make pefect sense to you?

      For me not being allowed to transfer a software license still doesn't make sense.

  • An Alternative (Score:5, Interesting)

    by ArmorFiend ( 151674 ) on Saturday August 09, 2003 @05:02PM (#6656526) Homepage Journal
    One thing they don't discuss in the article, but which I think would be legal, would be to permanently lease your equipment rather than sell it on eBay.

    E.g. Used router for sale - $ 400
    versus Used router for lease - $ 400 first month, $0 each additional month.

    If you really need service contracts negotiated through me, then I do it for you at a reasonable hourly rate for my inconvenience.

  • Cisco are heartless when it comes to this (Score:5, Informative)

    by Scott Hale ( 574751 ) on Saturday August 09, 2003 @05:04PM (#6656534)
    I bought an 831 new (so I have the license for it) back in June. After reading about the recent vulnerablility I contacted Cisco to get an updated IOS version. I thought it would be a simple process, considering some of the comments I read here. I recieved an email back from them telling me if I wanted it fixed, I would have to purchase a SmartNet contract. That was July 18, and I am still running a vulnerable version using the ACL workaround.
    • Keep trying on this, I had the same deal on a bunch of 837'a and 831's, contact TAC. They will help you. To be fair, I was stunned how helpful the support people were. I don't have a contract, they phoned me twice from the US to the UK, and someone there sorted out how I could get a 3DES image. Meanwhile the UK suppliers of the kit, were just getting pissed, because I had the gaul to ask for support.

      You have to give Cisco some slack, ok, they expect to be paid for software, but come a security problem, the
    • You need to site the Cisco vulerability for the router when you contact TAC sitting that as the reason your entiled to an upgrade.
    • I purchased a 1601 off ebay, two days before the IOS vulnerability. I called them that day, told the rep I'd purchased the router from ebay and had no service contract. He asked me what version of IOS I needed, and I had a new patch that day. He even helped me install it, and got me a different version when that one didn't work. He never once tried to shake me down.

  • No pity (Score:5, Interesting)

    by jmorris42 ( 1458 ) * <jmorris@[ ]u.org ['bea' in gap]> on Saturday August 09, 2003 @05:07PM (#6656549)
    If people can't be bothered to READ a contract before signing it I can't be bothered to care.

    I do read that sort of thing and that is why I will only buy from scum like Cisco if I have no other choice. And I usually do.

    You can buy sync serial cards on the open market you know.

    As for non-transferability, BS. They can probably refuse to sell a service contract on the used equip, perhaps even deny you updates. But "going after" you for possessing/using a piece of used equip would never stand in court. Doctrine of first sale allows copyrighted works to be sold by their rightful owner and EULAs are only valid in Virgina. So unless you have an actual contract with a company that specifically says you can't bring in a used box you are clear, and any such clause probably wouldn't stand in court if you were willing to spend the money to fight it. (i.e. one unit from eBay isn't worth a fight, 1,000 from an acquisition probably is.)
    • I seriously doubt it's any hardware company's intent to go looking for pirated copies of their router software, but they're basically slapping this $15,000 annoyance fee in there to try to make sales of their used equipment that much less attractive. Afterall, Cisco has already been hit hard once before by the dot-com colapse causing some of their biggest customers to turn into cut rate retailers of never-left-the-box equipment.

      I don't think they can go forcing people who buy used routers to pay the $15,00

    • That's why you will start seeing contracts that will say "This contract is governed by the laws of Virginia" as they try to leech.

      A stand needs to be made against this type of scumbag behavior.
  • An article over at infoworld discusses that buying that used router on ebay may not be a good deal if Cisco can find its way to screwing you.

    How about Nortel? Their systems all require software, and the licenses are entirely, 100% NON-TRANSFERABLE.

    They've actually got a page on their website warning people that they should ONLY buy new equipment from authorized resellers, lest they be guilty of license violations. Ie, call us when you've got a question about that used Nortel phone switch, and not only

  • We got $190k because of this... (Score:3, Interesting)

    by peterdaly ( 123554 ) <petedaly@@@ix...netcom...com> on Saturday August 09, 2003 @05:17PM (#6656592)
    We bought an EMC SAN from a bankruptcy auction of a failed telecom.

    We payed $5k for the unit (bid price), which came to probaly about twice that once all was said and done.

    EMC wanted some obsene amount of money to license us the software to boot the puppy up, so it sat in from of our datacenter for a few months. Then a sister division bought started looking into an IBM Shark for their datacenter that we would be using part of. Rumor is IBM gave us a $200k discount on the shark for the trade in of our EMC unit.

    So we made off with $190k from the deal! (kind of) Not a bad profit after our horror of EMC's license cost!

    To top it off, the EMC has been sitting in front of our datacenter for an addition 6 months or so. I fegure they don't even want the unit. They just didn't want us using it.

    That's my interesting experience with this.

    -Pete

  • what if Cisco gives you new software? (Score:3, Interesting)

    by DonaldBeckman817 ( 587451 ) on Saturday August 09, 2003 @05:17PM (#6656594)
    during the recent Big bug, I went around to all my routers, all of them used. I requested the top IOS with the best feature set for what we use each router, for each and every router, and know what? Cisco gave me .bin files for all of them. Since these came directly from Cisco, aren't these now arguably licensed?

  • Why this is wrong (Score:4, Interesting)

    by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Saturday August 09, 2003 @05:18PM (#6656596) Homepage Journal
    Companies charge you for updates to the software in the form of a support contract. Sometimes they even charge you per update, but that's relatively rare, so never mind that. If, with the purchase of a router or any other device for which you must purchase support and which has firmware which is part of the product (without it, it will not run, of course that's implied by "firmware") you got lifetime updates to the software for free, so long as you were the original purchaser, then it would be okay to charge people to "relicense" the device.

    But since you are required to pay for a support contract to get these updates, it is clear that the firmware is a separate product, even though it is delivered with the device, and the device will not operate without it. Note that many companies do not operate this way - these days you can download drivers for free for any PC you might purchase, via the internet. Even before the WWW became interesting for commercial purposes, you could generally call up their tech support, send them some money or make a credit card payment, and get the drivers shipped to you for a few bucks to cover a floppy (At the time, a not-inconsiderable amount of money when repeated frequently) and postage.

    Therefore, since you must pay for updates to the software, a given update becomes almost an item of physical property. You have paid for it, and the right to use it. Hence, when transferring the device to the next owner, they should take ownership of that instance of that version of the code. It should not be considered simply "licensed" to them. After all, you paid for it, not just in some vague way by purchasing the device, but through the purchase of a support contract which is generally the only way to legally get access to these firmware images. Therefore, you should be able to transfer it, or your license to it, or whatever language you would like to use for the same thing here.

    I should think it would be quite sufficient for the new owner to purchase a support contract and pick up. The answer to this "problem" is not relicensing fees, it's end-of-life. At EOL for a given product, current owners of the product should be able to purchase support for some given number of years, or commit to purchasing it, at a given price, and you will know how long you have to support the product. I think it's best to also commit to supporting the device at the current rate. As the device gets older, it will become less expensive to support, because more of the issues will be "known", and after end of life, you can refuse to add new features to the device without someone specifically paying you consulting fees for development.

    This way, there is a finite lifetime to a product, you maintain your support costs, and let's face it; If someone has a support contract you will provide installation support to them as many times as they would like to move and reinstall it; This is really the only possible way to excuse charging anyone ANYTHING more than the recurring fees of the support contract when they purchase and employ a used device. If a company purchased an entire other company's assets, then necessarily their firmware licenses would come with it. Why, then, is it reasonable to charge a relicensing fee when someone purchases used hardware? It is not.

  • NetApp (Score:2, Insightful)

    by trinity93 ( 215227 )
    Some net app boxes are nothing but Dell servers in disgise :) i have converted many of them to realy nice dual cpu 64bit pci file servers running linux with hardware raid

  • IBM has been doing this for years (Score:3, Informative)

    by jhines ( 82154 ) <john@jhines.org> on Saturday August 09, 2003 @05:22PM (#6656622) Homepage
    I remember the s/36 and as/400 market place, in that the OS was licensed, and didn't transfer with the hardware. You always had to license the SW from IBM for the going list price.

    With software, that is licensed, the rules are what ever the license agreement is.

    Microsoft is doing the same thing, in that the software isn't a product seperate from the HW as well any more.

  • Laws that 'just seem wrong' won't be obeyed. (Score:5, Interesting)

    by The Revolutionary ( 694752 ) on Saturday August 09, 2003 @05:22PM (#6656623) Homepage Journal
    "Tague and others think the manufacturers' restrictions are just not right. "It's a flat out scam," he says. "Just because it's typical, just because the other guys are doing it too, doesn't mean it's OK."

    How is it, in a nation where it is the will of the people that is to be represented and reflected in our laws and statues, our laws and statues reflect not the will of the people, but the will of an elite minority?

    What more evidence do we need than this that ours is not a government by the people, for the people, but instead a government by those who have power, for those who already have it?

    These businesses and corporations exist, and may operate only as we permit them to; they are by our permission.

    We must revoke their permission. We must revoke their permission to buy laws which ensure their profit margins. We must revoke their permission to buy laws which mandate revenue where there ought not to be any.

    What was it that the Justice Department lawyers told us, and the technology lobyist told us in their interviews; that it is naive, uninformed, and probably just childish of us to suggest that our government is in the pockets of corporations, and that corporations can "buy laws"?

    What I say to them is that it is they who are naive. The corporate interests of today do not need to buy a single new law to oppress us, to wrong us, and to devestate us.

    They do not, because our laws, our resources, our nation, were bought and sold to corporate interests long before any one of us were even born.

    We are born into chains and we die under their weight.

    If you struggle, it only drives those in power to bind us all the tighter. And they grin in delight. And they swim in their gold. And they build the flames higher.

  • It's not Cicso's fault... (Score:3, Insightful)

    by inertia187 ( 156602 ) * on Saturday August 09, 2003 @05:23PM (#6656627) Homepage Journal
    It's the seller fault for not telling the buyer about this. The seller originally agreed to the license, and should have pointed out the extra charge on eBay before bidders began bidding. A real estate lender has to do this before you apply for a loan. It's called a Good Faith Estimate, and it spells out the charges other than the monthly mortgage.

    Go after the seller, not Cisco.
    • Typical answer for a realestate agent, however the problem is software license, is it for the customer or the unit? If the software license agreement is non-transferable then there is the problem. Obviously companies like Cisco are hurting and putting the hit on internet companies so the can improve their cash flow. Non transferable software agreements are very questionable and I believe their validity needs a court challenge. In this case I think Cisco and the like will lose, this is clearly a case of purc

  • Linux Router Projects (Score:5, Informative)

    by niko9 ( 315647 ) on Saturday August 09, 2003 @05:24PM (#6656632)
    I was looking for a used SOHO series router on eBay, but I think I'm better off building a small Linux router and using something like Freesco [freesco.org] instead.

    I know I'm small potatoes in context to the article, but I wonder how many other large organizations, after having a experience simimlar to Mr. Tague's, will take a long hard look at a Linux based solution?

  • First sale doctrine... (Score:4, Insightful)

    by vsavatar ( 196370 ) on Saturday August 09, 2003 @05:25PM (#6656636)
    Their practices appear to violate the doctrine of first sale, which the Supreme Court has been found to heavily favor in the past. The parts of the agreement that govern the non-transferablility of the license could be invalidated if this were ever challenged in court. I think it would only take one lawsuit from a large corporation like a bank to take care of these prohibitive licensing terms. In the past, portions of contracts and complete contracts have even been invalidated because of terms that were not binding due to laws forbidding them. This could just be one of many of those.
  • IANAL (yet) but unless the guy selling the equipment on EBay signed a contract agreeing not to resell the equipment or software, First Sale applies here (First Sale = It's ok to sell the copyrighted thing you legally acquired). The one caveat is if the seller lives in a state where UCITA has been enacted, in which case he is bound by the shrinkwrap license agreement inlcuded with the software. So chances are the buyer got a nice router on the cheap that he can legally use as is which is what you would expe
  • But (Michael Tague's) delight turned to anger when he contacted NetApp to purchase a maintenance agreement for the used system. "They weren't interested in negotiating the maintenance agreement until we paid $15,000 to relicense the operating system that came with the unit"

    This is just another example of Sharecropping [slashdot.org]. It's Cisco's right to do whatever they want with their [soft|hard]ware platform, as it is for Microsoft and other commercial [hard|soft]ware companies. Having said that, I think it's reason
  • Sun does the same thing. While some people argue that this requirement might not stand in the court, the Solaris licenses are -not- transferrable. So, technically all those dirt-cheap Sun systems sold on Ebay do not come with right to use of Solaris on them even if it came preinstalled until proven otherwise in the court (in some countries, apparently, non-transferrable software licenses are illegal)

  • Actually you pay SCO, not Ford (Score:4, Funny)

    by nzyank ( 623627 ) on Saturday August 09, 2003 @05:58PM (#6656760)
    The OS in your car is embedded Linux, so you owe SCO $699 even if you bought the car new.

  • eBay VeRO program (Score:3, Insightful)

    by acceleriter ( 231439 ) on Saturday August 09, 2003 @06:25PM (#6656840)
    I'm surprised that since the object for Cisco is to prevent the resale of their routers, and this "relicensing" affront to the first sale doctrine is just a smokescreen, that they haven't pulled a Microsoft, joined eBay's "Verified Rights Owner" program and started killing any auction that contained the word "Cisco."

  • Accounting problem? (Score:3, Interesting)

    by Checkered Daemon ( 20214 ) on Saturday August 09, 2003 @06:44PM (#6656905)
    So I buy a bunch of Cisco stuff. Since the software can't be transferred, and the hardware will end up costing the buyer as much as, or more than, new equipment, all this new Cisco stuff immediately is worth $0 on the open market. Now according to GAAP (Generally Accepted Accounting Principals) assets are valued at the lower of cost or market. So these assets are now worth $0. Instant depreciation, and I get to write off the entire cost of the hardware and software as a business expense during one year, instead of spreading the cost out over five years or so.

    I Wonder what the IRS will say when somebody tries this?

  • $AVE your Money!! (Score:3, Insightful)

    by pair-a-noyd ( 594371 ) on Saturday August 09, 2003 @06:54PM (#6656941)
    Take an old clunker, two nics and go to
    http://smoothwall.org/beta/ [smoothwall.org]
    and download the latest package, smoothwall 2.0 Orient.

    It's free. It works. You can find clunkers everywhere for free.

    I refurb old clunkers and load smoothy on them.
    I resell them and make a few $$$ for my pocket,
    keep stuff out of the land fill and make some
    customer very happy for saving them BIG $$$$....

  • Where's the Competition? (Score:3, Interesting)

    by Esion Modnar ( 632431 ) on Saturday August 09, 2003 @07:01PM (#6656965)
    You would think that if just one or two router manufacturers said, "No, we don't pull that BS," this would force the rest to follow suit.

    So are they all winking at each other, and tacitly agreeing to screw the customer this way?

  • I get sun workstations on ebay, the price is right and I enjoy using these boxes.
    One can download solaris for free from sun, as well as patches, drivers, ect.
    This may be bad news, they might decide to ditch the free download eventually. that would really.. suck.
    I would not buy a cisco product. get a wan card and a linux box. your probably better off.
    just my $0.02

  • Simple solution to this problem (Score:4, Interesting)

    by Lord Kano ( 13027 ) on Saturday August 09, 2003 @07:40PM (#6657124) Homepage Journal
    Every time you purchase such restricted hardware, spin off a new Corporation.

    Cisco Router Model X SN#12039okaj0123iasj Inc.

    When you sell off the equipment, sell off the company. The software is licensed to that corporation. No need to relicense.

    LK

  • Amazing... (Score:3, Interesting)

    by StandardCell ( 589682 ) on Saturday August 09, 2003 @08:44PM (#6657352)
    Considering the downturn in the telecom market, I'd think that some of these companies would at least be willing to make new customers with some reasonable terms rather than piss them off. Maybe this is one of the reasons why the downturn happened in the first place.

  • Licenses... (Score:4, Insightful)

    by Craig Maloney ( 1104 ) * on Saturday August 09, 2003 @09:04PM (#6657403) Homepage
    And people wonder why I'm so adamant about using software that I can agree to the license for (GPL et. al). Having to re-license embedded software for hardware seems pretty ridiculous to me.

    Godspeed to the developers of alternative OSes for this hardware.

  • Is anyone really surprised? (Score:4, Interesting)

    by pherris ( 314792 ) on Saturday August 09, 2003 @09:44PM (#6657521) Homepage Journal
    What's next, buy a used Ford and pay Ford to transfer the license for the inboard computer's OS or face piracy charges if you continue to drive?"
    What's keeping Ford or any other car maker from doing that? Nothing. Why don't they toss in a clause stating that you can't say anything negative about them to boot? Maybe they'll require you to only buy your parts and sell your car through their chain of dealerships.

    The vast majority of corporations out there have only one myopic goal in mind: Make More Money. They will pollute any river, strip any forest, injure or kill any worker or customer to further their mission. Basicly corporations are thinking "Fuck everyone and the magic hand of Adam Smith will save us". Unless better laws are created to protect the individual's rights in contracts, corporations will continue to screw any one they want.

    I know,"Don't like the contact? Don't sign it." What happens when every new car dealer starts this or all the supermarkets require you use their "customer card" to buy from them. The RIAA would like to ban used CD sales. An EULA on all CDs would fix their problem nicely. The Magnuson-Moss Act needs to be revised to allow owner's rights to be transferred to subsequent owners and new laws are needed to heavily restrict conditions manufacturers place on goods during the sale. Of course this will never happen with all the money whores in Congress.

    Can some say when the erosion of our rights will stop? I can't.

    Welcome to Amerika.

    pherris

    (Oops, almost forgot: "Screw Flanders, screw Flanders, screw Flanders.")

  • This will stop once the accountants get wind of it (Score:5, Interesting)

    by thogard ( 43403 ) on Saturday August 09, 2003 @09:50PM (#6657534) Homepage
    Go ask your company accountant about what an asset is worth if it can't be resold for its intended purpose. What this means is that expensive cisco grear that is being deprecated over 5 years is fraud (the kind your CEO can get thrown in jail for). The device only has scrap value once you open the box so it must be deprecated in one tax year. What does this make MCI worth seeing how much cisco gear they own and no one in their right mind would buy all of them.

  • IBM sometimes does the same (Score:3, Interesting)

    by Prof. Pi ( 199260 ) on Saturday August 09, 2003 @10:16PM (#6657600)

    A friend of mine had some dealings with a sleazy company in Montreal that tried to screw him by attempting to steal his work and then telling the police that he stole their work, leading to his arrest. They tried to complete the project using their IBM AS/400 computer. He knew that the OS on their computer was pirated, so he snitched to IBM.

    These guys were in the business of buying and selling used IBM equipment. So IBM investigated, and discovered that a lot of the computers they sold had copies of the pirated OS. Seems they were buying the hardware without OS licenses. I don't know if that's because the original sellers had restrictions on selling the licenses, or just that they had transferred the licenses to other machines that they owned. But the upshot was that IBM started contacting the customers of this company, then started demanding license fees. Naturally, the companies were pissed at the sleazy sellers, since they assumed they were buying legit systems.

    Ultimately, my friend was acquitted, and the sleazeballs went belly-up.

  • Get A Grip (Score:5, Insightful)

    by ONOIML8 ( 23262 ) on Saturday August 09, 2003 @10:54PM (#6657774) Homepage
    Once again the Slashdot reaction is totally off base. No wonder SCO and Microsoft have so much trouble taking this crowd seriously.

    From the article:
    "...when he contacted NetApp to purchase a maintenance agreement for the used system."

    Two key words there: maintenance agreement.

    First you have to remember that nobody is REQUIRED to provide that service. If you come to me and ask me to provide a service then I'm going to tell you what I will do and how much I want for it. If you don't like it then you can look elsewhere.

    Anything else would be the same as you holding a gun to my head and forcing me to provide the service on your terms. That certainly isn't a fair business deal.

    So you want to compare this to a Ford. Fine. Go get yourself a 96 Ford Contour with 100,000 miles on it from someone advertising in the local classifieds. Then drive or tow the thing down to your local Ford dealer and demand that they sell you a maintenance agreement for the same price as a current production model.

    Go ahead, I'll wait.

    Oh, you're back? Where's the car? Lemme guess, the guys at the dealership ended up pissing themselves from laughing so hard.

    Maybe you should try again. Got that old Compaq 386 laptop out in the garage? Give Compaq/HP a call right now and tell them you want a 5 year maintenance agreement on the damn thing and you're not paying a penny more than $500 for it.

    It must be because these are all corporations, right? We all know that anyone trying to do business and make a living is evil.

    How about you? Would you want to operate the way Michael Tague expects?

    Somehow I don't think that Mr. Tague would do business this way either if he were on the other side.

  • Cisco (Score:3, Insightful)

    by Cramer ( 69040 ) on Sunday August 10, 2003 @12:48AM (#6658151) Homepage
    In the case of Cisco... around the time of the Sept. 15, 2000 document, they were seeing an increasing amount of virtually new hardware entering the marketplace for pennys on the dollar from all these failed dot-com's for which Cisco was never paid. It's not a big leap to see how Cisco would want to stop that immediately. And if they can come up with this vague, unspecified cash-cow of a "recertification" process, then it's even better for Cisco.

    Having seen what little is available on this laughable process, I'd rather start my own router company than deal with the bullshit. $7000 to "inspect" a 7206VXR. They will only do the inspection during business hours (8-5M-F); the router will be powered down and disassembled during the process; only Cisco is allowed to be present at the inspection. And the best part: it's a binary process... it either passes or fails. No other information is provided -- i.e. why it failed and what we need to do it get it to pass.

  • What actually needs to be done in these cases (Score:3, Interesting)

    by cactopus ( 166601 ) on Sunday August 10, 2003 @01:11AM (#6658245)
    One must make sure that whatever hardware they are buying has a copy of the OS with it...backed up several times preferably. It's pretty easy to back up IOS images... I'm not so sure about the NetApp.

    That way there is no issue when you buy or sell the item. If the customer wants support or updates ... they have to pay for them... of course they may be hit with a re-license issue, but honestly you can still tell the company to f* off.

    The other poster who was talking about first sale has a very good bit of bargaining ammunition...as for the Cisco rep who made the other guy pay after the fact I would have also told that guy to f*** off. The hardware comes with an IOS image and the customer doesn't have to buy support from Cisco... they just won't get any new IOS images or help from Cisco.

  • This is not specific to Cisco (Score:3)

    by forged ( 206127 ) on Sunday August 10, 2003 @04:14AM (#6658647) Homepage Journal
    The article is somewhat unfair to Cisco. Their IOS software, like all software, has a clause in the EULA regarding the non-transferability of the license. This is also the case for practically all other software vendors out there.

    Someone reminds me when, let's say Microsoft, provided you support for software after you transfered it (illegally) to another computer. This just never happened to me or to any of my accuintances as far as I know.

    Hence product activation from software vendors to enfore this part of the EULA.

    The only mechanism hardware vendors can have is to track serial numbers (Cisco) or Service Tags (Dell) and enforce entitlement at the device level.

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