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3rd party SFPs (Cisco Compatible) are produced by companies not on the Cisco AVL and therefore are NOT Cisco approved. These suppliers will give you 100% compatibility guarantees, but Cisco won't support them. This is important to be mindful. Cisco reserves the legal right to refuse service and/or support if your problem is determined to be related to 3rd party SFPs or memory. We've heard from other legends, but we think what is important to keep in mind is that you are at risk of losing some of a higher level support with third party SFPs.
We've had a lot of customers using third party SFPs, such as glc lh smd, 1000base sx and these SFPs call in for further hardware problems and the SFPs go unnoticed. However, if you simply are attempting to bring up a fiber connection and it won't come up and need help from Cisco you won't get far. Remember this if it's your business or job on the line.
Are Third-Party Cisco-Compatible SFP Transceivers Safe?
From our experience, the answer is an unequivocal YES! The majority of 3rd party SFP transceivers are manufactured and set up in exactly the same plants assembling officially-branded transceivers.
It's likely that, there is no difference between the official Cisco transceiver and a third-party plug, besides the branding and about two hundred to a few thousand us dollars.
Commands Enable Third-Party SFPs On Cisco Device
The third party SFPs won't work automatically. Cisco-approved SFP modules use a serial EEPROM which contains the module serial number, the vendor name and ID, an original security code, and cyclic redundancy check (CRC). When a SFP module is inserted in the switch, the switch software reads the EEPROM to confirm the serial number, vendor name and vendor ID, and recomputes the security code and CRC. If the serial number, the vendor name or vendor ID, the security code, or CRC is incorrect, the program generates this security error message and places the interface in an error-disabled state.
Here is a common log message indicating the hardware platform has detected an invalid glc-t 1000base-t SFP:
SYS-3-TRANSCEIVER_NOTAPPROVED:Transceiver on port Gx/x is not supported
These commands will change from platform to platform.
Luckily there are some undocumented (and unsupported) commands to avoid this condition. From configuration mode input the following commands. Remember that because the first command is undocumented you can't "tab" and "?" your way to the command. You can only type the entire command in.
switch(config)# service unsupported-transceiver
switch(config)# no errdisable detect cause gbic-invalid
Your first command will yield the following:
switch(config)#service unsupported-transceiver
Warning: When Cisco determines that a fault or defect can be traced to the use of third-party transceivers installed by a customer or reseller, then, at Cisco's discretion, Cisco may withhold support under warranty or a Cisco support program. During the course of providing support for a Cisco networking product Cisco might require that the end user install Cisco transceivers if Cisco determines that removing third-party parts will assist Cisco in diagnosing the cause of a support issue.
The above command helps it to be clear that you just risk losing support. We've used the above commands on Cisco 2960, 3560, and 3750 platforms.
Ultimately it's your decision of the customer to make the call. Only they are able to ultimately decide the risk versus reward. It's our job as technology partners to explain the pros and cons of either approach.
Additional information:
Third-Party Policy: Cisco Product Warranty
SFP Invalid Error: Cisco Product Tech Note
Article Source: SFP Transceiver Modules Wiki