Solution Providers Confronted with Industry “Fakes”
CRN and VARBusiness magazine recently reported on the prevalence of counterfeit goods in the computer industry and the difficulty many solution providers can have identifying them.
Recently, Aqua Systems, a Roslyn, New York-based solution provider sold counterfeit goods to clients. Whether or not the solution providers are guilty of knowingly doing it or not will be determined by the courts, but the incident has damaged the company and caused channel sales to decline and incredible revenue losses.
Many solution providers are finding themselves embroiled in problems with identifying bona fide hardware and software, and may end up getting trouble if they are not careful at checking products.
Recent reports by experts KPMG and the Alliance for Gray Market and Counterfeit Abatement (AGMA) stated that the IT industry experiences about $100 billion in losses due to black market products annually. The U.S. Department of Homeland Security (DHS) also states that computer hardware made up nine percent of all counterfeit products taken by U.S. Customs and Border Protection in 2006. The total worth of the goods seized was $14.3 million, which was an increase of 198 percent from 2005. Other reports from the Software Piracy Study declared that 22 percent of total software installations in North America last year were from counterfeit copies, which represents a loss of $8.1 billion in sales for software companies.
The products most counterfeited for solution providers are those produced in mass quantities, including Gigabit interface converters, WAN interface cards, memory, printer cartridges, network modules and regular desktop applications from companies such as Cisco Systems and Microsoft.
Despite high-profile cases of solution providers having difficulty with counterfeit goods in the United States, China is still the country with the largest instance of hardware and software counterfeiting. For more information on this story for solution providers, visit the attached link.
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