Cisco has said it will not cover the labour costs of proactive equipment swap-outs for customers with Cisco products that are expected to fail after 18 months, even if those products are covered by a valid Smart Net services agreement that includes onsite service coverage.
Cisco is proactively providing replacement gear for eligible customers whose Cisco switches, firewalls, routers and cloud-managed switches contain a faulty component discovered to cause system failure, regardless of whether the customers' equipment has failed yet or not. But the networking giant said it would cover the costs of onsite removal and installation services only in cases where it is replacing equipment that has already failed. Cisco said it is not proactively sending out engineers for affected products that haven't failed yet.
"Our funding for the replacement program is being used to offer replacement products, even before the product fails, to help mitigate any disruption to business," said Cisco in an email to CRN USA. "We will honour all onsite services contracts, based on the terms of the contract. We are committed to working with and supporting our partner community, and providing the best quality products for all Cisco partners and customers."
That posture, however, is causing friction in the market with solution providers feeling squeezed between customers who want the replacement products installed free of charge before they fail and Cisco, which is telling its partners it will provide the hardware at no cost but will not pay for the time it takes the channel to re-install the equipment.
Cisco on 2 February disclosed that multiple product lines, namely Nexus switches, ASA firewalls, ISR routers and Meraki cloud managed switches, contain a faulty clock signal component that causes systems to degrade over time, showing a propensity to fail after 18 months or longer in production. Cisco has warned that once the "component has failed, the system will stop functioning, will not boot and is not recoverable".
Cisco is providing replacements for products free of charge for the affected products before they fail if they are under warranty or covered by any valid Cisco services contract dated as of 16 November, 2016. However, if an affected product has not yet failed, and is under warranty or covered by any valid services contract that includes onsite services, Cisco will not provide those onsite services.
Cisco partners are in a position where they need to decide whether to offer the services for free and eat the costs themselves or present a bill for their services to angry customers.
Cisco has told CRN USA that it would not reimburse partners who are sending out engineers to proactively go on-site to replace products that contain the faulty component.
"Unfortunately, because our funding is focused on providing the products, we're unable to reimburse for on-site services to replace the affected devices," said Jennifer Ho, manager of Cisco's Business Critical Communications, in an interview with CRN USA. "Because the product doesn't actually have any issues for 18 months, we really wanted to focus our funding for the issue on a replacement program. So we're proactively offering the replacement of products even before the product fails, and we really believe that this focus on providing the best-quality products is the right focus for our Cisco customers and the partners' customers."