Evaluating Used Hardware for New Purchases

Used IT Equipment Can Deliver Value For The Right IT Infrastructures

If you're ready to continue growing your company's IT infrastructure now that the economy is starting to slowly rebound, however, your IT budget is still stuck back in the recessionary period, you may want consider purchasing quality used IT equipment from reputable sources.

There are plenty of good providers for used IT computer equipment where you can stretch your IT dollars and improve your IT capabilities, all at the same time.

A popular IT sourcing location for small and midsize businesses (SMBs) is the auction house eBay. That's surprising to some CIOs, however, when budgets are tight, scrappy CIOs get creative.

Need some used Cisco network equipment? Try Network Hardware Resale of Santa Barbara, CA, where used Cisco gear is their specialty, from routers to network switches to firewalls to telephony gear and more.

For used IBM, Dell, Hewlett-Packard and Sun servers, consider Vibrant Technologies in Minneapolis, as well as used storage and networking gear.

Another server and network gear vendor that focuses on the used market is World Data Products in Minnetonka, MN. They carry used hardware from Dell, HP, IBM and Sun, as well as networking and security products from F5 and Juniper Networks, as well as storage solutions from Brocade.

For used telecommunications hardware and equipment, consider Telmar Network Technology of Plano, TX, which offers certified pre-owned gear at 30% to 75% off new equipment prices.

If you're looking for used desktop PCs, laptops, monitors and used Apple products, give TechTurn in Austin, TX, a look. They earned a good reputation for refurbishing and reselling such gear.

Also remember to check with your existing hardware vendors. Several hardware companies carry used equipment in stock from trade-in programs which you might be able to purchase for a lot less than new equipment. Companies like Dell Computer, IBM and HP sell refurbished hardware such as servers, desktops, laptops and storage solutions at discounted prices.

Dan Kusnetzky, an analyst with The 451 Group, said such hardware procurement strategies can be good for CIOs and businesses, but added that it definitely depends on your infrastructure, standards, tolerance for risk and IT budget.

"I think if one has the proper architecture for your software applications, with few or no single points of failure, then acquiring used equipment that has a warranty, support and has been tested can be a very good move to reduce costs," said Kusnetzky. "Other organizations will look at that and say that the used equipment does in all probability include a higher chance of failure, and they would shy away from that, saying the additional costs savings would not be worth it because the cost of a failure would submerge any savings from purchasing used equipment."

Procurement of used hardware may be best done for equipment in areas that are not mission-critical, such as desktops, laptops, printers or redundant networking gear. "A knowledgeable person who has examined their needs and examines their environment may find that the selection of certain devices from a refurbished stockpile to be an excellent choice," Kusnetzky said. "With storage systems, they may not feel as comfortable buying the whole storage system but they might feel comfortable buying one array that is part of the whole."

What's needed to ensure confidence, he said, is a careful evaluation process. But since hardware often makes up only about 20% of a businesses' IT costs, with staffing and software costs making up the bulk of the rest, savings on equipment won't be as material as in other IT spending categories.

Analyst, Charles King, principal of Pund-IT Inc. in Hayward, CA, comments that "for many companies used equipment presents a viable alternative in the same way that a used car can present a viable alternative to buying something new off the lot."

A key benefit of used IT hardware, he said, is that "you are not going to be paying for brand new, latest-generation technology, and frankly, for many businesses last year's storage or servers are probably going to give you plenty bang for your buck."

King did caution, however, that he recommends dealing with reputable vendors in the used equipment market, many of whom are often partners of the main IT hardware manufacturers, to avoid problems with warranties and service after the sale. When IT equipment is delivered from verified companies that are often part of the used equipment communities, buyers have more confidence in their purchases and more reliable access to the equipment history, such as how many hours the equipment has been used, he said.

"It's kind of like a gold seal of approval," King explained. "I think it is probably wiser for companies to do business with that type of supplier rather than buy something from Craigslist or buying off eBay."

The key is to recognize there are other sourcing options for your IT procurement needs, so if new equipment pricing doesn't fit the budget, you may be able to find used IT gear that can accommodate your budget and your IT objectives. Sometimes making IT systems work means going to Plan B.