Cisco Is Making It More Difficult to Use Pre-Owned Hardware [Updated]

A Cisco Catalyst 2960 Series switch with cables plugged into it.
Older switches like the Catalyst 2960 series could be bought and sold easily on the used market. With newer switches forced onto Smart Licensing, this is threatened.

Without telling their customers, networking hardware manufacturer Cisco has drastically changed the way it sells products.

Update: A previous version of this article stated that units with Smart Licensing would cease to function without a valid license. After further review, we’ve determined that this is not necessarily the case—Cisco’s documentation is vague and goes out of its way not to say what happens. We haven’t tested this ourselves, we don’t know what will happen until we see some instances of these licenses expiring in the wild. We’ve removed that sentence, clarified some other points, and rephrased our concerns about the way this new licensing system works.

Not-So-Smart Licensing

Cisco’s new Smart Licensing System was introduced in 2014, but started becoming mandatory with the IOS XE 16.9 update in October, which brought Smart Licensing to Cisco’s Catalyst 3650, 3850, and 9000 series switches. Cisco claims this allows for easier, more flexible management of hardware licenses—but it also gives Cisco more control over hardware you’ve purchased.

Before Smart Licensing, switches were largely a set it and forget it deployment—you bought a piece of hardware along with a license to use the software on it. If you sold that hardware, the license went with it. Third-party companies could help you maintain your equipment when you ran into problems, even if the manufacturer had deemed the product End of Life for first-party support.

Smart Licensing works differently. Companies can acquire a pool of licenses for their account, which are shared automatically among devices they’ve deployed. Those devices phone home to Cisco regularly for validation, and if they aren’t able to do so will go back to “Evaluation Mode” after one year. (Cisco has alternative methods for validating devices in air gapped networks, but they still require regular validation in some form.) Evaluation Mode doesn’t contain any strict functionality limitations on most devices, but it’s unclear what happens after the evaluation expires.

More importantly, since the license resides on Cisco’s servers, and “Cisco will be in charge of whether the unit works or not,” explains Todd Bone, founder and president of XS International, a third-party IT maintenance company. They could change their minds later on and limit your ability to use hardware you thought you owned. XSi isn’t the only company expressing their concerns—third party maintainer Curvature hosted a webinar walking their customers through the problems with this approach.

The End of Ownership

Since these devices are tied to the original purchaser’s account, it has potential ramifications for buying and selling used hardware. “This will dramatically change the ability to buy used or refurbished Cisco hardware that run smart licensing because the original end user only owns the hardware, not its usage,” explains Bone. If you’re trying to sell a unit that is regularly showing alerts about its unlicensed status, it may drive potential buyers away. They could re-purchase and re-certify the license with Cisco, but—according to Curvature—that could cost enough to negate whatever savings you get from buying pre-owned hardware.

Ultimately, we’ll need to wait and see what effect this actually has on the used market. But by enabling smart licensing, you’re putting more control in Cisco’s hands, giving them the ability to make bigger sweeping changes down the line.

Furthermore, this could limit your ability to get service from third-party companies when a product reaches end-of-support with Cisco. “It’s not clear if the owners of Cisco hardware will continue to have entitlements outside a SMARTnet contract,” says Bone. “Cisco may cut access to their entitlement servers for units they don’t support.” Coupled with a decline in the used market, that could lead to more Cisco e-waste in landfills.

Bone says he’s afraid most Cisco customers don’t realize what they’re giving up when they “upgrade” to Smart Licensing, since Cisco has been evasive on clarifying the matter. (The audience of Curvature’s webinar would support this fear, since many were unaware about some of the changes imposed by the new system.) So many folks will update and unintentionally give up that control.

If you can’t fix it, you don’t own it. And with these changes, Cisco has taken a step toward stripping crucial rights away from their customers. This is exactly why Right to Repair is so important, so make your voice heard to your legislators. And if you’re a Cisco customer, make sure you reach out and complain directly to Cisco, too.

Title photo by Johannes Weber/Flickr.