Cisco Systems Pulls Out of Russia, Destroys Millions of Dollars Worth of Equipment (gagadget.com) 74
Cisco Systems has left the Russian market, destroying tens of millions of dollars worth of equipment and components in the process. This is due to the fact that the developer of network equipment has no plans to resume operations in the country. Gagadget reports: Cisco Systems announced it would cease sales in the Russian market in March 2022. Three months later, the company refused to renew its licenses. In addition, at the same time, the American manufacturer announced its withdrawal from Russia and Belarus.
As it became known, Cisco Systems decided to physically destroy spare parts, product demonstrations, equipment and even furniture. The value of the destroyed stock is estimated at [$23.42 million]. The company has also disposed of fixed assets worth [$12,600]. By the end of 2022, Cisco Systems had reduced its workforce by a factor of 12 to five employees. The company terminated contracts with the rest in mid-2022, paying them a total of [$2.4 million]. The TASS Russian News Agency first reported the news.
As it became known, Cisco Systems decided to physically destroy spare parts, product demonstrations, equipment and even furniture. The value of the destroyed stock is estimated at [$23.42 million]. The company has also disposed of fixed assets worth [$12,600]. By the end of 2022, Cisco Systems had reduced its workforce by a factor of 12 to five employees. The company terminated contracts with the rest in mid-2022, paying them a total of [$2.4 million]. The TASS Russian News Agency first reported the news.
a single router (Score:5, Funny)
Cisco destroyed $23M of equipment? Must have been a single low-end device without any licensing.
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Don't contribute to the economy, drain value from it.
That's what they did.
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>> Don't contribute to the economy, drain value from it.
> That's what they ... do
That's their Modus operandi
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That's what Putin is doing. Last tally I heard was that he's squirreled tens of billions worth of assets out of the country. Though he's going to run out of places to visit and spend it now that he's a war criminal.
Re:Vendors pulling out of .ru is stupid. (Score:5, Insightful)
Stolen Russian assets have always been welcome in London. Evgeny Lebedev even got a seat in the House of Lords.
Re: Vendors pulling out of .ru is stupid. (Score:2)
Maybe. But then maybe once the majority of wealth is transferred, those properties will be seized and re-sold.
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Living abroad is gonna be expensive for him, he has to pay higher bribes than what he's worth to The Hague.
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And then, you know, there's the cost of keeping all those adoring fans bearing busts... [npr.org]
Plus it is really hard and expensive to hide a personal train [theguardian.com] in another country.
Naah... Putain will have to stay either in one of the Pantsir-guarded [newsweek.com] castles he stole, his collection of identically furnished bunkers... or a safe, secure and humane cell in Hague. [youtube.com]
He should try that last one. It would be like staying in a 3-5-star hotel in Russia. Only cleaner. And safer. And more humane.
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He'll never arrive alive in The Hague. Far, far too many people have far, far too much to lose should he blab.
Re:Vendors pulling out of .ru is stupid. (Score:5, Insightful)
Better to stay there, get money from Russians, and then transfer your profit out. Don't contribute to the economy, drain value from it.
The money isn't the issue, the capabilities are.
Russia is undergoing a massive brain drain from all the educated young men fleeing the country so they don't get used as cannon fodder.
Russia is also undergoing de-industrialization because they lack the capability to make a lot of parts they formerly imported.
Cisco leaving town and destroying their high-tech equipment on the way out hurts Russia on both fronts.
Re: Vendors pulling out of .ru is stupid. (Score:2)
Re: Vendors pulling out of .ru is stupid. (Score:5, Informative)
Russia is breaking down washing machines to get microchips for their military. Even Cisco stuff is useful to them.
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They have been stripping a lot of aircraft for parts too. Even Russian made aircraft use parts built in the West, like German radar and autopilot systems.
When they started the war and sanctions were laid on, Russian airlines had loaned quite a few aircraft from Western companies. They kept them and stopped making loan payments, not least because they couldn't transfer the money anymore. Those aircraft have been written off in the West, and either kept flying in Russia or stripped for parts.
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Some have been, but generally Russia has been repairing their jets in Turkey and UAE since either were perfectly fine breaking sanctions and also dealing in stolen grain.
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For a call center with 8 sites, my annual buy was 4-5 million.
It's legit, 20MM is nothing. Other than virtue signalling, it's like a cargo container worth of crap.
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Better to stay there, get money from Russians, and then transfer your profit out. Don't contribute to the economy, drain value from it.
The money isn't the issue, the capabilities are.
Russia is undergoing a massive brain drain from all the educated young men fleeing the country so they don't get used as cannon fodder.
Russia is also undergoing de-industrialization because they lack the capability to make a lot of parts they formerly imported.
Cisco leaving town and destroying their high-tech equipment on the way out hurts Russia on both fronts.
That would have been true 20 years ago. Today? They'll be easily replaced by Huawei.
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That would have been true 20 years ago. Today? They'll be easily replaced by Huawei.
Pretty sure that'd be them breaking sanctions on microprocessors from other nations since I can guarantee Huawei kit will be full of western chips. Great way for Huawei to entirely destroy its market access in the west.
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Re:Vendors pulling out of .ru is stupid. (Score:5, Interesting)
Exactly this. Foreign companies are not allowed to transfer any profits they make out of Russia. They are also required to make a compulsory "donation" to the Russian state if they try to sell assets and liquidate their Russian business.
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Posting anonymously as an ex-employee.
While I worked there (20+ years) we used to get a 90% discount on internal orders. And I suspect what we paid was overpriced even including shipping costs. So increase the number from the article by at least an order of magnitude.
I'm positively surprised they took this long to disengage themselves and keep supplying their customers with spare parts and honoring their support contracts. It must mean they still believe that honoring those kinds of commitments means so
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Customer support and service contracts aren't free; that's part of why places pay more for Cisco than for a slashdotter's Tomato install.
Cheap, well-supported, functional. Choose two of the three, and if "functional" isn't one of your choices you can't have either of the other two.
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Eh... not a far-fetched statement.
It was likely closer to maybe 6 units if they were enterprise routers.
Cisco stuff is some of the worst-value equipment in the world, and you'd only use them if you were already invested in the Cisco ecosystem (eg phones, which are like $500 a piece, not including headset)
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oh, "horror show".
Few routers (Score:3)
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Value of warehoused items is different from what you pay when you purchase the items.
It's the magic of tax workarounds. A $10 item is sold for $800 and the $790 is packaging, handling and software license cost. The licenses aren't in a local office but centrally held.
With the most recent Cisco switches the licensing is only valid for 3 or 5 years, so this means that if license upgrades are blocked then they'll get some networking headaches the next few years.
Good job, Cisco (Score:5, Informative)
Destruction of equipment and components ensures Russia won't be able to use any of it for their invasion of Ukraine. Even destroying furniture is good so the drunk thieves get no use from them.
If all those sales of household appliances [time.com] from Russia's neighbors could be severely restricted, that would help tremendously as well.
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Absolutely. "Salt the earth". If it isn't worth taking with you - or possible - it's still worth rendering it useless on your way out.
Re: Good job, Cisco (Score:2)
I really hope I can find a good Youtube video of all of the trashing and smashing.
Re:Good job, Cisco (Score:4, Insightful)
Basically to stem the flow of people pulling out of Russia, Russia basically closed all avenues of liquidation. You can't transfer your profits out, and if you try to sell your equipment, you must make mandatory "donations". Effectively, to any company pulling out, it's a complete writeoff. Any money you make pulling out is going to be claimed by the Russian government.
So if your only choices are to liquidate and give your cash to the Kremlin, or leave behind valuable equipment, then destroying it all making it worthless costs the company nothing. Wish we knew or had pictures. Wondered if they simply smashed it or decided to toast it - some AC power applied to the DC voltage rails to pop the chips.
Smashing the furniture has a similar effect - Cisco probably also had some useful furniture like standing desks that had salvageable chips too..
Price check (Score:5, Insightful)
23M is what they wrote off on their tax records.
The market price and 'real profits' might have only been around 5M had they actually sold it all.
Real actual 'value' ... probably more like 500K.
Re:Good news for Huawei (Score:5, Insightful)
Who in their right mind would let Cisco staff enter their premise unsupervised after this?
Do you let ANY contractors onto your premises unsupervised?!
Re: Good news for Huawei (Score:2)
Put a few M-80s inside of those computers, blow them up, and finish off the remains with sledgehammers and axes.
Bonus if they could've gotten away with some copper building wiring.
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Thanks to Cisco for millions of dollars of Huawei revenue growth in 2023, and a country full of long time customers. Russia can pay in oil or gas, thank you very much.
The market for Russian oil and gas is much smaller now, and they are selling it at a discount because they have no other choice. And of course the more oil and gas they have to trade for non-military items they can't get elsewhere the better.
It has only been a year. Give them a few more years of negative GDP growth and it is going to start to hurt. If they are still in Crimea 10 years from now they might well have the old Soviet economy back, and that is what doomed the Soviet Union. Or they may just en
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I'm sure he means Vladimir Putin, the war criminal. I just think of him as Eeyore whenever I see a picture of him and Winnie though.
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So China has Russia even more by the balls now.
We'll wake up and find that Russia is a has-been superpower and has been replaced by China in all aspects, with Russia essentially being China's colony, only good enough to provide raw materials and cheap labor.
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Slash and burn (Score:2)
It's pretty bitter sweet to release Cisco just slash and burned Russia...
There's a lesson in history from last century (Score:5, Insightful)
Defeating your enemy is one thing. Defeating and humiliating your enemy is a whole 'nother can of worms.
There is a corollary: lobotimizing your enemy is of limited utility unless you have defanged him first.
The Russians were defeated, humiliated, and lobotomized about 30 years ago, but they were not defanged. And here we are.
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Why do I see the history of Germany from a hundred years ago repeated here?
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Lobotomized? They were always lobotomized, from even before the tsars.
Jokes aside... (Score:2)
It must have been pretty fun.
Hope they got to have some fun at least (Score:5, Funny)
Who hadn't dreamed of going at a server rack with a sledgehammer?
Comprehensive (Score:4, Informative)
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I've never taken a sledgehammer to a rack, but I have literally used one to "secure erase" mechanical hard drives before. It only takes a few good strokes on a concrete surface, and I figure if I dent it deeply enough to bend the platters it's secure enough for my needs.
On a related note, I've also shot monitors with a rifle before, but that was simply for fun.
Sing with Sting (Score:2)
Talking to the Russians in a language they get (Score:3)
Cisco: Not only are we leaving the country, but we're going to salt the earth behind us and burn everything as we leave thus crippling you *and* depriving you of replacement infrastructure.
That's how you hate fuck like you mean it.
Re: Talking to the Russians in a language they get (Score:2)
Depriving them of replacement hardware? Theyâ(TM)ll just switch to something from China like Huawei, if they hadnâ(TM)t already started doing this anyway. Sanctions are just helping China and Chinese companies.
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Yeah, that's the thing, you don't want to do that. As Russia.
Remember why Huawei is on the US shitlist? Russia is already becoming China's bitch, you think they want to speed this up by pretty much telling them every secret they still have?
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chinese networking gear.
good. they'll get what they deserve.
btw, how is that capacitor, ivan? leaking a bit? oh, my. shame.
Huawei (Score:2)
I guess this is when Huawei will enter the chat...
People have forgotten why Cisco is doing this. (Score:4, Insightful)
The market exit is 100% driven by money. Destroying gear left in country is part of that strategy.
What no one has brought up yet is the numerous sanctions that are in place. A tech company like Cisco is directly in the gun sites of western sanctions.
Cisco wants to be a lot farther away than arms reach from anything going on in Russia. They definitely do not want to be accused of selling kit used in the war effort. Those penalties could be in the billions if it becomes a hot media topic.
A few million is a lot cheaper than the legal fees alone in a defence. Destroying gear will also show clear intent of exit to western politico's.
Remember there is also the Iran angle. If Iran sources kit from Russia that has western origins these companies are going to get slapped. Russia is most definitely kissing up to Iran at the moment. With numerous reports of captured military gear being sent to Iran for reverse engineering. Tech companies definitely do not want there names on the same press release as mentioned of these events.
Now as for salting the earth as previously mentioned. No it's not. The next western friendly leadership there will give such favourable deals to western companies to come back that it will be embarrassing to watch.
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Cisco is directly in the gun sites of western sanctions
There's a big difference between being in someone's gun sites and being in their gun sights. One is much more dangerous than the other. It's important to not get these confused.
Of course, one country's gun site may be another county's target, so neither is a completely safe place to be.
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Cisco may simultaneously be in gun sites and gun sights.
Factcheck maybe? (Score:3)
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Scorched earth (Score:2)
Cool (Score:1)
Manly... (Score:2)