Why Second Hand Switches Are Good For You

Using network hardware after its advertised life cycle ends is a good thing. It saves money and resources.

The trouble is the industry is set up on the premise that organisations will go on buying lots of new kit. The old kit might still work, but the new equipment will have new features.

More crucially, the new kit will have certified technical support. Established vendors turn off the technical support as a means to persuade users to buy new equipment.  And no CTO wants to lose technical support.

On Tuesday, US-based second-hand network equipment specialist Network Hardware Resale launched NetSure 4HR, a global four-hour hardware replacement service for second-user systems, available to customers in major cities throughout North and South America, Europe and Asia-Pacific.

NHR reckons it can save customers more than 50 percent on recurring maintenance costs, and delay costly upgrades by extending the life of networks.

We asked Glenn Fassett, general manager of international operations at NHR about the value of old hardware, the politics of upgrading and the promise to solve problems in just four hours.

Billions are being lost through needless upgrades

How big is the market for pre-owned hardware?
Gartner began tracking the pre-owned industry a few years ago, and estimated its value at $2 billion (£1.24bn), while Cisco recently ranked it significantly higher at $7 billion (£4.34bn). With Cisco reporting net sales at the close of its last fiscal year of $43.2 billion (£26.75bn), it’s clear that there is room for exponential growth of the pre-owned and refurbished market.

Can you put a figure on the value that is lost to industry by junking kit that is working?
If even half of businesses repurposed their networking kit, billions of dollars could be recouped or saved across the board.  It doesn’t make sense to a company’s business strategy, or to the environment, to dispose of equipment that works without getting value for it. It really is as simple as that.

Everyone is waking up to the double-dip. Through the sale of IT assets, a company can raise capital which can be directly reinvested back into the business. Meanwhile, businesses that purchase pre-owned equipment are making significant savings.

Who are the villains that are preventing hardware re-use, and what tricks are they using?
It’s fair to say that the major manufacturers’ business models are built entirely around innovation and driving future sales to increase shareholder revenue. They are all geared towards the ‘next big thing’ and have been successful in persuading the market that this is what it needs. Customers are starting to realise that this is part of the manufacturer’s strategy to increase the manufacturer’s profits – not the customer’s.

Additionally, manufacturers and OEMs are using their end of life policies to emphasise the ‘risk’ factor and influence companies to conduct costly wholesale ‘rip and replace’ upgrades. Again, customers are starting to realise that these policies can be another way of persuading them to invest unnecessary capital.

When end of life dates are announced, many manufacturers do not continue to support the equipment with their own maintenance programs, making companies feel they need to upgrade. We believe that customers – not manufacturers – should determine if the technology has reached the end of its useful life.

We feel it is important and valuable to customers to break this pattern by educating them and providing alternative options to realise the true lifecycle of their gear and make the most out of that investment, without expensive upgrades.

The risks are overstated

What do you say to people who believe that re-using equipment is risky?
Using Cisco-certified engineers, we have accrued over 15 years’ of world-class diagnostic testing. This means that we can go to the market offering our customers less than a 1 percent technical failure rate. It is a point of pride for us to identify faulty equipment and ensure it never enters our inventory, let alone our customers’ networks.

That means that everything we sell is tried and tested – it works, guaranteed. The same cannot be said for new equipment entering the market; the standard failure rate of new equipment from premier providers like Cisco, Foundry and Juniper is 3-5 percent.

As well as offering our customers an initial saving of up to 90 percent on networking gear (against equipment which is new to the market), we are backing this up with a dedicated network maintenance program. Simply put, we are helping businesses to  avert mission-critical network failure.

Our program covers current generation networking equipment, as well as legacy networking products that are no longer supported by Cisco SMARTnet. Our NetSure maintenance cost goes down with the depreciation of the equipment-cost. With Cisco SMARTnet, users are continuing to pay the same service level cost even when this outweighs the value of the equipment after a few years of depreciation.

We also offer a lifetime warranty on all pre-owned OEM-branded equipment and all new Network Hardware Resale-branded equipment. If you experience an equipment failure, our technical engineering support teams will either solve your problem over the phone or replace the equipment.

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