As a Cisco Silver VAR with multiple specializations this is a critical issue.  It’s true we (true solution providers) invest thousands of dollars on an ongoing basis in training, labs and support.  This online auction mentality relating to unauthorized products devalue the perceived value of the solution we are selling.

Ask yourself would you want to buy a cheap ASA to protect your network perimeter but not have access to the frequent software / subscription updates? Customers need to ask the age old question is it too good to be true?

If it looks too good to be true ask:

• Is the person you are purchasing the product from authorized to sell it?  
• These products are heavily software dependent ... Do you / can you get a legitimate license?
• Is this a real or counterfeit product? (a growing problem in our industry)
• Can you get the product on SMARTnet?  Critical to supporting your network core.  (Even if you get it on SMARTnet will Cisco support your unauthorized product when the need for support arises?)

The higher end the product, the more risk customers face... We as Solution providers need stress this and Cisco needs to do a better job at educating customers to both the risk and the associated liabilities.  

Hi Steve,

The main problem is that many manufacturers want to control pricing, but not distribution.  My contention has always been that in order to elevate ASP’s, manufacturers MUST close or limit sourcing on the products of concern.  Your Cisco example is a perfect example in that the product is obviously an enterprise level product, but it is treated as an iPod or other commodity product.  Cisco is not the only manufacturer doing this but, again, this is an excellent example.  Our pricing engine is reactive in that we capture market pricing for products and our system raises or lowers our selling price based on the results.  The “Amazon” model simply drives prices down, not to mention that many times they promote refurbished product in the same places that they promote new products, also driving ASP’s down.

Enter the MAP policy.  Manufacturers are terrified of implementing an authorization process that would limit sourcing because they feel it will slow their sales down.  By the same token, they also complain about ASP’s falling to the point that all products are a commodity on the internet.  So, the increased implementation of MAP policies has kept me very busy over the past few years.

Why MAP?  A MAP policy somewhat allows a manufacturer to control advertised price, and also allows them to keep sourcing wide open so MAP offenders may still purchase products from distribution partners.  I know – it is a conflicting comment at best, but it is true.  What’s wrong with MAP policies in general?  They are not enforced by the manufacturers.  We as partners are expected to blow the whistle on our competitors (unwritten rule), and then the manufacturer reacts.  This is a tremendously flawed process which brings us to where we are today.

My solution?  Open sourcing on commodity products is one thing.  But, to have open sourcing on enterprise and business products is absolutely ridiculous.  I would suggest that manufacturers have custom criteria set up for every type of partner (Solution Provider, VAR, DMR, etc.), and the partners that agree to meet the partner requirements would have access to sell the products.  That being said, I don’t believe it would be feasible for a DMR to go through the same training processes as a Solution Provider as we do not install products.  However, there is criteria that we can meet that would separate us from the price hackers of the world, and still limit sourcing to “authorized partners.” 

I just wanted to offer my 2 cents worth to you as it is something I wrestle with every day: React to pricing, or lose market share  - tough choice.

Thanks for listening.  I hope you are doing well.