Demand for used equipment rising

November 12, 2012

Amid tight IT budgets, more Asia-Pacific companies are looking for cost savings, reports AMIT ROY CHOUDHURY

With most regional companies either facing IT budget cuts or cautious spending regimes due to tight economic conditions, one company that is anticipating good business in Asia-Pacific is Network Hardware Resale (NHR).

NHR is the world’s leading provider of pre-owned and new networking solutions. It is an independent reseller of pre-owned Cisco, Brocade/Foundry and Juniper networking equipment and a premier member of Dell’s PartnerDirect Program.

Speaking to BizIT, Mike Sheldon, NHR’s CEO, noted that organisations worldwide purchase networking equipment from NHR, including Global 1000 companies, mid-sized enterprises, government entities, education institutions, healthcare organisations and telecommunications service providers.

The company offers a wide range of products with savings of between 50 and 90 per cent off manufacturers’ list prices. In addition, it offers network equipment support round the clock and a one-year advanced replacement warranty for all hardware equipment at a less than 0.5 per cent failure rate.

In the Asia-Pacific region, the company is based in Singapore and covers markets in Hong Kong, Taiwan, several South-east Asian nations, India, Korea, Japan, Australia and New Zealand.

Mr Sheldon noted that the Asia-Pacific region is strategic for the company. “We believe our business will continue to exponentially expand. We are currently in the process of establishing our presence in the Philippines, Vietnam, Indonesia, Malaysia, China and Taiwan. This would allow us to access fourteen fast-developing and developed markets in Asia. As we expand in the region, we will continue to also expand our product offerings.”

He noted that the company’s regional hub, strategically located in Singapore, gives the company access to regional SMBs and Fortune 1000 companies with headquarters in the Republic. “Much like their Western counterparts, companies located here need to contain costs while continuing to grow infrastructure and stay competitive. Singapore today contributes about 22-25 per cent of our Asia-Pacific revenues and has grown 20-25 per cent over last year.”

The company has 18,000 square feet of office space in Singapore and has more than 65 employees and market specialists focused on 10 major markets and supporting 15 languages.

“Today, after six years in the region, we generate more than US$40 million in revenue, which represents 20 per cent of the company’s global earnings. Since 2007, we have grown by 500 per cent and have helped customers save more than US$100 million,” Mr Sheldon said.

Globally, NHR has more than 350 staff – who are fluent in more than 30 languages.

Mr Sheldon explained that NHR considers all equipment it sells as “pre-owned”, meaning originally it was sold by the manufacturer or an authorised reseller and now is being resold. “Some of our inventory is used and some equipment has been resold without being used (that is they are still in its original factory sealed boxes).

“All of the used equipment that the company sells undergoes full inspection, cleaning, testing and reconditioning to return the equipment to as close to original condition as possible. In some cases, equipment requires minor repairs or cosmetic improvement and is then designated as ‘refurbished’. Our goal is to return equipment to ‘like new’ condition while offering exceptional savings of between 50 and 90 per cent off manufacturers’ list prices.”

He adds that savings on equipment prices doesn’t mean one has to sacrifice on quality. Equipment sold by NHR goes through an exhaustive testing process, which results in a lower failure rate generally accepted for new equipment, Mr Sheldon said. “In addition, we follow stringent product and service standards and have been verified by TL 9000 very strict quality control processes. Our excellent service standards also mean we can offer round-the-clock service support
and less than 0.5 per cent failure rate along with a lifetime warrantee on all pre-owned equipment sold.”

The company also offers third party diagnostic consulting services to companies that are interested in looking at alternative networking solutions, which may include a hybrid combination of both new and refurbished networking equipment.

“We aim to help customers to better understand the lifecycle of their networking equipment to make educated decisions on when and how to upgrade. For example, most enterprise networking equipment is built to last 15-45 years  (depending on the equipment type), yet many companies toss them out when they’re told by the OEM (original equipment makers) to upgrade – very often within 5-6 years of the original purchase. Sometimes all you need is to replace a switch or components of the networking infrastructure, rather than the entire system,” Mr Sheldon observed.

NHR gets most of its equipment from the same companies that are its customers. “When a company upgrades its network, cancels a project or closes a location, NHR will buy its surplus networking equipment or take it as credit towards a purchase. We also source equipment from systems integrators who may purchase gear for a client only to see the project cancelled or changed, as well as other used equipment resellers.”

Mr Sheldon noted that the market uncertainty and cautious spending patterns have instilled a need for businesses to look for alternatives that can help achieve the best value for service and a higher return on investment.“With Europe facing austerity measures and stalled growth in the US, companies in Asia continue to grow.”

"Global demand for our products and services is on the rise as companies explore alternate networking opportunities and real time service and support capabilities – especially in times of crisis and network breakdown," he added.

The Business Times