Cisco executives in a roundtable session with reporters this week addressed the industry's memory component degradation issue in products developed between 2005 and 2010. Cisco's taking a $655 million charge to address remediation actions customers are taking to replace products that include the defective memory components.
Many of the affected Cisco products include switches, routers and modules that have outlived warranties and/or are in end-of-life, end-of-sale status. Cisco's policy for remediation includes fix-on-fail -- replacing a product once its memory degrades to the point of being inoperable -- and its usual technology migration plan for upgrades.
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Respondents to a Cisco blog on the issue however, are concerned that they can't afford the fix-on-fail downtime, especially if their networking products are core or mission-critical to their business. Some are requesting proactive replacement parts form Cisco but the company is standing fast to the fix-on-failure policy.
"We've done assessments with hundreds of customers," Cisco President Rob Lloyd said. "In real life, fix-on-fail is the method of choice for the majority of customers. We're the only company to say we will pay for that. Everybody else says buy new memory. It's a customer and Cisco partnership to deploy the right methodology. If someone wants to do it differently, that's why we took the ($655 million) charge. We're trying to deal with this transparently."
Lloyd characterized the charge as a "very aggressive assumption" of use cases to repair.
"It's a repair reserve," he said. "Once you knew that was there, we took the charge to handle all use cases."
Cisco first became aware of the defective memory in 2010, according to information on its website.
Jim Duffy has been covering technology for over 27 years, 22 at Network World. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy.
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