Optical components

Poll: Cisco's Overdoing It

While the topic is generating its share of controversy, most Light Reading readers don't seem to think the Cisco Systems Inc. (Nasdaq: CSCO) practice of reselling optical interfaces is unreasonable.

We're talking about the concept, not the price. In the current LR poll, 39 percent of more than 600 respondents say Cisco's methods are OK but could be toned down a bit. Another 32 percent flat-out say, "Good for Cisco!"

At question is Cisco's practice of charging reportedly huge markups on optical modules for its routers. The modules are based on standards, but beginning in 2003, Cisco software began rejecting modules bought from other vendors. So, users have to buy Cisco's modules -- and pay a premium as well.

The practice came under scrutiny this week as Andrew Schmitt of Nyquist Capital issued a report saying modules make up a bigger share of Cisco's profits than previously believed. (See Cisco's Secret Franchise.)

Cisco's module markups have some users steamed, but only 22 percent of the poll respondents thought the process should be illegal, while another 7 percent said they don't care. (Why take the poll, then?)

Responses were split on whether the practice is good for Cisco's investors. Forty-seven percent said they'd cheer Cisco, were they investors, while another 44 percent said they'd be worried -- after all, there's a chance Cisco's profits might be padded by its optics sales.

What's a user to do? One possibility is to start buying up cheaper knock-off optics, clones rigged to pass Cisco's procedures. Most respondents -- 68 percent -- said they'd do this; the other 32 percent said no, apparently put off by the possibility of faulty or underperforming modules.

There's still time to make your voice heard: Take the poll here.

— Craig Matsumoto, Senior Editor, Light Reading

btierney 12/5/2012 | 3:41:10 AM
re: Poll: Cisco's Overdoing It
yes there are standards but we all know that not every "standard" works with every other thing "standard"

we're talking about mission critical routing and optical infrastructure after all.

would you like United, American or Delta et al to buy cheaper spare parts from the Ukraine or Brazil that claim to be "standard" or would you like the parts qualified by the airframe manufacturer?

ozip 12/5/2012 | 3:41:07 AM
re: Poll: Cisco's Overdoing It How altruistic you are.


While Cisco is exercising their right to set prices, secure competitive supply and make profits, you can exercise your right to buy product from someone else...

dBGain 12/5/2012 | 3:41:07 AM
re: Poll: Cisco's Overdoing It Thats poppycock. An SR module from Finisar is as good with or without a Cisco logo. And given the absolutely relentless preasure CISCO puts on module vendors to reduce prices, it only seems reasonable that some would find a way to capture some of that profit for themselves and benefit customers.

In fact, Cisco is the one who violates the standard by having the "Cisco bit"...
Steve0616 12/5/2012 | 3:41:07 AM
re: Poll: Cisco's Overdoing It When a business becomes so successful and powerful that its convinced it can now impose a "take it or leave it" attitude, the loss of positive regard often marks the top of their growth cycle.
nikoloz 12/5/2012 | 3:41:05 AM
re: Poll: Cisco's Overdoing It Cisco does support 3rd party optical modules, at least in my 3750s. Same is mentioned in their Q&A about 3750 series catalysts. Are there any restrictions on other models?
sigint 12/5/2012 | 3:40:52 AM
re: Poll: Cisco's Overdoing It The overwhelming "yes" to the question regarding use of clone optics suggests this: Cisco users do not now care about this, because they can work it around. Cheaply, and possibly legally.

Consumer consternation results from the inability to break a monopolistic stronghold. There's light at the end of the tunnel, here. Bravo, cloners!
stud 12/5/2012 | 3:40:42 AM
re: Poll: Cisco's Overdoing It Believe MRVC make a product called FiberDriver and manufactures varuious SFP's and other optical components.

Believe sa user could connect from the Cisco equipment using a copper connection to the MRVC FiberDriver product where the copper connection could be connected to an MRVC copper connection SFP. From then on believe you can use MRVC (or othger vendor) optical components.

Another approach might be to use a lowest cost possible Cisco SFP to connect via fiber to a MRVC FiberDrive with a fiber SFP. From then on believe you can use MRVC or other vendor optical components.
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