Back in May, Brad Reese blogged about the The insanity of Cisco software relicensing on Network World's Cisco Subnet Blog. In it, he describes the pinch Cisco is putting on people who buy used Cisco gear.
Now, you'd think that buying used gear would be a reasonable thing to do if you're looking to save money on equipment. In fact, businesses buy used gear all the time. In the real world, I can buy a used car and I can still take it to a certified mechanic. In the real world, I can buy a used fax machine, used copy machine, or a used computer, and still buy a service contract. The act of purchasing the equipment and the service contract are two different decisions, and manufacturers generally honor a used equipment buy.
In Cisco-world, that's not true. Cisco forces everybody to "relicense" its gear when it's acquired on the used or gray markets. The relicensing charges can be as great or greater than the price of purchasing a unit directly from Cisco. Brad specifically says, "Purchasing a Cisco software relicense for a used Cisco 2621XM router costs more than purchasing a Cisco Authorized Factory Refurbished CISCO2621XM-RF unit from Cisco's inventory."
What's up with that? Well, what's up with that is that Cisco is a hardware company and they make their billions (with a B) selling hardware. No hardware sale = no 70% profit margin = no bonus for Cisco execs. In Cisco-world, the used equipment market is a bad, bad place. Consequently, Cisco is out to kill the used equipment market by making it economically unattractive to buy your gear from anybody but Cisco. Sure, they'll sell you a "Cisco Authorized Factory Refurb," but it's still going to cost you.
Several Vyatta customers have come to us after facing this insanity. They figured they could pick up some used Cisco gear fairly cheap and then call Cisco for a support contract. No deal. Before buying Cisco SmartNet, you'll have to "relicense" your gear.
Consequently, for less than the price of a Cisco "relicense" fee, Vyatta customers have been able to switch. Welcome to the real world. Welcome to Vyatta. If you have switched, you might want to write Cisco a Dear John letter.