Cisco Systems pulled out of Russia: destroyed $23.42M worth of equipment

But for serious, likely too risky to have the potential for anything that can fall into a sanctioned country’s hands. Just destroy it and write it off.

Arrath• 3 years ago

That assumes that Russian officials would let the items leave.

ChuckNorris89• 3 years ago

Bingo! AFAIK Russia has banned the sale or expatriation of western assets out of Russia.

bena• 3 years ago

Because you're not getting that hardware out of Russia through normal channels.

In the best of times, in the best of places, you'd be able to do that. Decommission the hardware in use, pack it all up, ship it wherever.

It is not the best of times in Russia and it was never the best of places.

In the best of times while operating in an adversarial market (to put it diplomatically), you have to know you're doing this well in advance and slowly phase out the equipment. Some of it is likely physically installed in the locations. And you have to do this while essentially receiving no new equipment. Which you could do by just faking shipments and manifests. But you're effectively smuggling at this point.

Now, with everything going on. You have to worry about Russia just sort of claiming your hardware/business/people and daring you to come get it. You get your people out and torch everything you can on your way out.

moate• 3 years ago

A few things.

1- That involves added costs that you may or may not recoup (read sibling comment about Russia "not allowing it" which doesn't seem out of hand). So if you don't want it in the current State's hands, and you can't reliably export them, destruction might be the right choice. 2- Part of the goal may be the headline. Either good press for Cisco or bad press for Russia, but visibility can be a goal as well.

Jerry2• 3 years ago

They probably had special NSA implants inside of them and didn't want it getting out. [1]

[1] https://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa...

axus• 3 years ago

It'd be really impressive if the NSA could intercept shipment a router manufactured in Russia or China, and then re-insert the shipment into the supply chain. Now I know why Cisco gear always takes forever to ship.

ss48• 3 years ago

"By the end of 2022, Cisco Systems had reduced its workforce by a factor of 12 to five employees."

I think something got lost in translation here.

janpieterz• 3 years ago

I read it as they originally had 60 employees. Odd wording.

gremlinsinc2• 3 years ago

I think they maybe mean 12x5, so from 60 to 5 but don't quote me on that.

yamtaddle• 3 years ago

I guess this is what happens when people take math word problems as a style guide.

g42gregory• 3 years ago

This is very bizarre. All sanctions have carve-outs for exactly the Cisco products (so that customers can always safely get online!) Now it will all get replaced with Huawei products. How is this better?

7thaccount• 3 years ago

Fair point. I don't think we've thought through all the implications of this.

mtnGoat• 3 years ago

Until they are replaced they will not get updates, leaving them open for possible intrusions. Let them have Chinese equipment, starving them of western technology to reverse engineer, steal or sell to competitors isn’t a bad thing either.

monocasa2• 3 years ago

I doubt they have a problem putting their hands on enough IP to reverse engineer, despite the sanctions.

TulliusCicero5• 3 years ago

Part of the point of sanctions is to reduce Russia's options, it's understood that some products will just get replaced by ones from outside the geopolitical "West".

Presumably they weren't already using those other options before because they were worse for some reason or another, and so it still hurts to have to switch. Plus, having fewer options may mean it's harder to negotiate a good deal.

postalrat2• 3 years ago

Whatever the reason was clearly it was a mistake.

gremlinsinc2• 3 years ago

CIA should've taken over ops of Cisco in Russia and put backdoors in all infrastructure routers. I'm surprised they didn't.

jpgvm• 3 years ago

That reason is all to commonly simple inertia.

Breaking the inertia on a whole bunch of geopolitical norms has been the largest result of all this mess.

Freezing foreign reserves and restricting access to international financial messaging systems etc is probably the biggest change to the status quo and the reverberations of that have set in motion huge changes.

The unilateral sanctions have been levied before, but usually only against "backwater" places that have no chance to fight back and thus most countries with a functional military and economy were never too scared of it.

Applying the same sort of doctrine against a functional (even if barely so) nation like Russia has set off alarm bells in every nation that doesn't identify as "Western". This is why you are seeing actual progress towards international trade being settled in non-USD currencies. The breaking of petrodollar and the shifting allegiance of OPEC away from the West after ~40 years of tenuous "cooperation" is also a big consequence of this.

It's very unclear waters ahead now. I'm not really sure breaking all these norms was worth it vs just sending traditional support and utilising traditional sanctions. If Russia was expelled from Ukraine within months of enacting it then I might have had a different view but now I'm sceptical this was a good idea.

josephcsible• 3 years ago

It's obviously bad when Western countries use Huawei products, but I don't immediately see why it's bad when Russia does.

donmcronald• 3 years ago

Three months later, the company refused to renew its licenses.

Does the equipment stop working?

I don’t understand how any country in the world is using equipment that can be turned off by the manufacturer. Infrastructure, communications, farming, etc. should all be run with non-revocable licenses. Make it the law.

atemerev• 3 years ago

Not your production -- not your coins^W hardware. In peacetime, it doesn't matter too much, because nearly nothing can outweigh the reputation loss if there is a case of remote equipment sabotage. In wartime, however, all bets are off.

Not that I have any pity towards Russia, but, say, China can also do this in the case of war.

jstarfish2• 3 years ago

Yeah, we know. The US proactively banned Huawei gear to prevent the same rug from being pulled out from under us. Europe has Juniper.

Same with some foreign governments moving to private-label Linux variants to reduce reliance on [US-produced] Windows.

Next is TikTok, to eliminate foreign software with large domestic deployment.

Unless we backdoor Android/iOS, the US doesn't have too many more strings to pull.

goodpoint2• 3 years ago

"Cisco Systems decided to physically destroy spare parts, product demonstrations, equipment and even furniture"

The_Colonel• 3 years ago

I don't think that answers the question. OP asked (probably) about hardware deployed on client premises, but running proprietary software requiring license (or perhaps subscription as the "renew" suggests?).

wjholden3• 3 years ago

No.

Cisco IOS/IOS-XE routers and switches will complain that you haven't licensed them correctly, but it doesn't impact functionality.

Cisco shot both it's feet years ago with an unpopular "SMART Licensing" scheme. One of my proudest moments as a net tech was the shocked silence when I told a room of Cisco employees that we weren't upgrading our 3850s past 16.6 (or something) because we refused to deal with their SMART licensing. They came up with a solution and we ended up upgrading (there was a feature in a later version that we wanted).

In the past, there were different software images for different feature sets. If you could get ahold of an image you didn't pay for, it would just work and you'd have functionality that wasn't licensed.

In the really distant past, this worked but not well because you'd need specialized hardware for things like fast encryption for VPN. So, if you didn't pay for the securityk9 license and used the 2811 without a VPN module, it would work but not well.

Anyways, I'm not aware of Cisco having any ability to brick customer equipment. I read this article as saying they destroyed their own property in branches and warehouses within the Russian Federation.

tinus_hn• 3 years ago

You won’t have a solution for the monthly CVEs for Cisco’s firmware though.

crazygringo• 3 years ago

But that's like saying if you don't pay your mortgage the bank isn't allowed to repossess your house. You think banks are going to keep providing mortgages?

The ability to remotely disable equipment is essential in order to allow for cheaper financing plans, to make sure customers don't steal stuff they haven't finished paying for, or that they've only been leasing.

Sure, you could pass a law prohibiting that. But then customers have to pay a whole lot more in financing/leasing because there's much more incentive to stop payment but keep the equipment, and repossessing the equipment gets messy. (You can move/hide a tractor or a router much more easily than you can move a house.)

godzillabrennus• 3 years ago

Several times in my 20 year career I’ve seen startups get financing for equipment then turn around and not pay the bill. Makes perfect sense to add this kind of DRM for financing but we all know nation states will abuse it.

drivingmenuts• 3 years ago

The site is ostensibly in Ukraine. This may be propaganda. It might be disinformation.

Just FYI.

jokowueu3• 3 years ago

The source is from a Russian source

https://tass.ru/ekonomika/17451425

datadeft• 3 years ago

So Russian sources are trustworthy now?

stickfigure• 3 years ago

Related: What's the current status of iOS and Android devices in Russia? Are they still getting updates?

ussrlongbow• 3 years ago

They do

flangola7• 3 years ago

How? They're sanctioned

cameron_b• 3 years ago

Cuirously, Putin has been photographed with Video Conferencing gear similar to what Cisco sells, but from competitor Polycom ( now known as Poly, but made when it was Polycom )

I can't imagine this is anything more than a good opportunity to cut bait and get a good pres release on the write-off

thefz• 3 years ago

What a waste of rare earths, minerals and metals.

perryizgr8• 3 years ago

Knowing Cisco's prices, $23 M must be only like 10-20 network appliances lol.

Cisco Systems pulled out of Russia: destroyed $23.42M worth of equipment

Related Stories