These days, it seems as though affordable information technology solutions are available for organizations and institutions of all sizes. They promise security, safe and streamlined infrastructure, and steadfast internet, all while helping the client save pennies on the dollar. But at what real cost do these services come? Are the services even legitimized? When IT solutions are provided and serviced from unreputable or little-known entities, the cost might actually be greater, in the long-term, than the savings.

The FBI suggests that the use of counterfeit IT services could greatly increase the potential of hackers breaking down and back-dooring systems to gain access to and control of vulnerable systems. These services – known as gray market and black market products, depending on the case – pose great threats to those who fall prey into counterfeit IT marketing.

The Harvard Business Review reports an estimated $7 to $10 billion worth of products are sold every year in the United States outside manufacturers’ (in all respects, not just IT) authorized distribution channels. For these producers, gray and black market distribution presents a serious problem. Following, ITS takes a closer look at such markets, and how organizations can better protect themselves from becoming a victim.

Gray Market Versus Black Market

The gray market represents a collective system of unauthorized sales channels for products and services. While gray market products are not necessarily illegal, the act of offering and selling such goods through third-party means is often deceitful. Gray market IT products and services might be less expensive than those bought through official IT firms, but are often inferior in purity and potency. The products may be counterfeit or have counterfeit parts. For example, a firewall security system might be advertised as such, but might be a second-hand product or contain a second-hand component (such as a hacking mechanism or virus) that is represented as new and untainted.

In some cases, gray market products are authentic, but distributed illegally, perhaps to exploit variations in costs and prices in different parts of the world. Warranties, updates, or other support are usually not available for gray market products.

Black market information technology typically involves transactions outside of the official economy (dealing with illegal goods or services). Known by several names — black economy, underground market, shadow market, parallel economy — a black market is a highly organized and vast entity where the regular taxation rules and norms of trade are not adhered to.

In the black market, goods and services are purchased and sold violating all restrictions like rationing or price controls. The transactions that take place in this market are considered to be “under the table” transactions, which occur outside official, law-abiding, and government-sanctioned channels.

IT professionals in every industry today are impacted by both gray and black market products and services and the distribution of such.

Protecting Your Company from Black and Gray Market IT

When it comes to protecting your company or organization from unethical IT vendors, businesses must stay vigilant. The Information Technology-Information Sharing and Analysis Center provide valuable information on various sectors. The IT-ISAC charges for membership, but it provides useful threat information. Companies should also make sure to only purchase and accept sensitive IT services from reputable firms.

Keep in mind the saying “this seems too good to be true.” When it comes to IT services, the same might very well hold true. Just because the price of a certain manufacturer seems attractive doesn’t mean that it’s the best bet. Those searching for services should do their due diligence to find a firm that provides true, trusted, and tried solutions. For better or worse, there’s always a tradeoff between risks and rewards when a company deploys technology.

See it, Say it

When you see something, say something. It is easy for people to do their part in keeping products and services out of the gray and black markets. Individuals and companies alike can prevent used, expired, tainted/tampered, or recalled goods and services from entering such markets by seeking professional product destruction services.

Stay Safe from the Start

Information Transport Solutions, Inc. (ITS), a Uniti company, is a full-service provider of technology solutions. We integrate voice, video, and data to make organizations more profitable and productive. We have been listed on the Inc. 5000 list of fastest growing private companies for four consecutive years.

ITS provides tried, trusted, true, and reputable products and services for our clients. Our services are always sourced and distributed directly, mitigating the potential for any gray or black market corruption. To learn more, contact us directly.

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