interactive.wsj.com
A lot of analysts now say that tech companies such as Cisco can't even begin to turn the corner until the gray market inventory is burned off. And based on that assumption, it isn't surprising to hear that Cisco may be attempting to expedite that process by destroying perfectly good second-hand gear and components.
"Cisco is taking back a lot of its own equipment. Tons and tons," says John Lynch, a principal of Asset Recovery Center, an Eatontown, New Jersey-based firm that buys and remarkets gear from bankruptcy liquidations. "And they are just crushing it."
Lynch contends that Cisco has hired Houston-based Waste Management to destroy certain critical parts, known as supervisor cards, that are integral to Cisco routers. Without the cards, routers are basically useless, he says. "They are the brains of the machines," Lynch says.
...The netherworld of asset recovery isn't a tidy business. Lynch says Cisco's service reps sometimes drag their feet when he wants the company to recertify gear. In one case, when he was selling gray-market gear to a major Cisco customer, Lynch says he had to use the customer to pressure Cisco to recertify the gear. "Cisco risked the loss of a major customer that has bought hundreds of millions of dollars' worth of gear. [The customer] is under budget constraints, too, and let Cisco know about it," Lynch says.
Cisco wouldn't comment on the assertion. |
