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Hardware Manufacturers Gouging Customers

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?"

28 of 364 comments (clear)

  1. Good news, bad news re: Cisco by numbski · · Score: 4, Interesting
    The good news is that there is an excellent replacement: Microtik.

    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*

    --

    Karma: Chameleon (mostly due to the fact that you come and go).

    1. Re:Good news, bad news re: Cisco by ShieldW0lf · · Score: 5, Interesting

      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.

      --
      -1 Uncomfortable Truth
    2. Re:Good news, bad news re: Cisco by cduffy · · Score: 4, Interesting

      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.

    3. Re:Good news, bad news re: Cisco by Dark+Lord+Seth · · Score: 5, Informative

      Read. The official way on how to respond to a (possible) GPL violation.

    4. Re:Good news, bad news re: Cisco by Fat+Casper · · Score: 4, Funny
      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.

      --
      I spent a year in Iraq looking for WMD and all I found was this lousy sig.
  2. What's the point? by Fishead · · Score: 5, Interesting

    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.

    1. Re:What's the point? by Valar · · Score: 4, Insightful

      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.

    2. Re:What's the point? by gaijin99 · · Score: 5, Insightful
      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.

      --
      "Mission Accomplished" -- George W. Bush May 1, 2003
    3. Re:What's the point? by Grishnakh · · Score: 4, Funny

      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.

    4. Re:What's the point? by Alsee · · Score: 4, Insightful

      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
      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 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.

      -

      --
      - - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
  3. don't give them any ideas by Anonymous Coward · · Score: 4, Funny

    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

  4. Re:Hrmmm by the+eric+conspiracy · · Score: 4, Informative

    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.

  5. New Concept by Dachannien · · Score: 4, Insightful

    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.

  6. Reselling the same thing. by mopslik · · Score: 4, Interesting

    "$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.

  7. Worst... policy... ever! by bennomatic · · Score: 4, Insightful
    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.

    --
    The CB App. What's your 20?
  8. An Alternative by ArmorFiend · · Score: 4, Interesting

    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.

  9. Re:Hrmmm by frovingslosh · · Score: 4, Insightful
    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.

    --
    I'm an American. I love this country and the freedoms that we used to have.
  10. Cisco are heartless when it comes to this by Scott+Hale · · Score: 5, Informative

    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.

  11. No pity by jmorris42 · · Score: 4, Interesting

    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.)

    --
    Democrat delenda est
  12. Errr no by Archfeld · · Score: 4, Insightful

    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....

    --
    errr....umm...*whooosh* *whoosh* Is this thing on ?
  13. Laws that 'just seem wrong' won't be obeyed. by The+Revolutionary · · Score: 5, Interesting

    "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.

  14. Linux Router Projects by niko9 · · Score: 4, Informative

    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 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?

  15. Selling used routers by billstewart · · Score: 4, Insightful
    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.

    --

    Bill Stewart
    New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
  16. Actually you pay SCO, not Ford by nzyank · · Score: 4, Funny

    The OS in your car is embedded Linux, so you owe SCO $699 even if you bought the car new.

  17. If the distribute their products in the US by Sycraft-fu · · Score: 4, Informative

    They have to play by US law. Now they could, of course, just stop selling stuff here and there'd be little anyone could do about it. However a US court can exert control over them so long as they have a US arm of operations. This is how the EU can exert control over Microsoft, despite it being a US company. They do bussiness in the EU and hence are subject to the laws of member nations if the wish to continue to to bussiness there.

  18. Re:There is no longer a benefit in buying used by arkanes · · Score: 4, Informative

    Did you read the article? This isn't a router from Best Buy we're talking about here. It's resales (most likely from bankruptcy settlements) of high end networking equipment - the list price of one of the items is 60 grand. The guy got it for 4.

  19. This will stop once the accountants get wind of it by thogard · · Score: 4, Interesting

    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.

  20. Get A Grip by ONOIML8 · · Score: 4, Insightful

    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.

    --
    . Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.