A New Look at Used Networking Equipment

Pre-owned and refurbished networking gear offers savvy companies outstanding deals, extended warranties, impressive responsiveness and stellar post-sale support.

When people buy anything used—be it a car, golf clubs or electronics—they typically are seeking a more affordable price tag on a high-ticket item. It's no different for any company considering pre-owned networking equipment— and the results deliver undeniable savings or noticeably more for the dollars spent. For companies that do not require the latest-generation equipment, cost savings of 50 to 95 percent are reasonable to expect. IT professionals also are finding that pre-owned and refurbished networking equipment comes with other huge advantages, including access to a wide variety of current and past-generation products, expedited shipping, standard one-year advanced replacement warranties and responsive technical support—all rarities when using the traditional procurements channels of equipment manufactures or authorized resellers.

The proposition sounds quite intriguing, so why don't more companies buy pre-owned networking equipment? One answer is that many companies, large and small, already do. The word is spreading. A growing number of companies, including communications service providers, financial institutions and healthcare providers—all entities that truly know the importance of maintaining mission-critical networks—are among the organizations that are installing preowned equipment in their production networks.

Despite this fact, IT managers remain cautious—as they should regarding any important purchase. Their key concerns center on trusting the procurement source and ensuring the quality of the equipment obtained. So how can first-time shoppers be sure pre-owned or refurbished equipment is the right choice?

But Isn't New Better?

Depending on your networking needs, the newest equipment on the market may be nothing more than the most expensive. Like selecting the hottest rookie in the draft, shiny, new networking gear loaded with the latest accessories may carry a mind-blowing price tag. In contrast, many times a proven veteran with a solid track record is more economical and the surer fit.

Each year manufacturers bring their latest releases to market, but some times the new features aren't relevant to many businesses. If your environment won't benefit from these new bells and whistles, then the increased investment will not generate an additional return on investment. With original equipment manufacturers' mark-up on new equipment typically in excess of 90 percent, buying pre-owned equipment can significantly reduce core networking costs while freeing needed capital for other mission-critical technology deployments or strategic investments.

Although OEMs release product updates quite frequently, industry watchers agree that routing and switching equipment actually has quite a long lifespan. Pre-owned equipment, therefore, may not only be a cost-effective alternative in the short run, but also a viable part of most companies' long-term network technology roadmaps.

Know Your Options

When considering new hardware, discuss these needs with an expert in previous-generation equipment. A manufacturer will not always share options for less-expensive configurations. For example, a company considering the newest router or switch on the market could instead purchase the previous model and notice very little, if any, performances differences. In terms of reliability, there also may be no discernable drop-off. Curvature helps IT professionals select the previous generation equipment that meets their requirements at prices as much as 90 percent below the manufacturer's proposed new configuration.

Many companies take advantage of the huge savings available on the secondary market to stockpile "spares" for their networks, keeping onsite back-ups of critical equipment in case of emergency. As with any purchase, planning ahead allows shopping around for the best value.

Many companies report that sparing is a much more cost-effective strategy than buying extended manufacturer warranties, especially on previous-generation equipment. This approach also saves time and frustration by avoiding the endless series of tiered service requests. With spares "on the shelf," an increasing number of companies double their value by using them for testing and corporate training without having to affect the production network. So what should companies look for when they consider the pre-owned market? Here are five tips for getting the best deals on used equipment.

Do your research
As in any industry, capabilities and levels of service can vary widely. Investing time to research the various secondary market players upfront can help avoid headaches down the road. Visit the company's website, check with the Better Business Bureau (www.bbb.org), glean recommendations or cautionary tales from various IT message boards or blogs, search Dunn & Bradstreet (www.dnb.com) to check financial stability and contact the company's references. If anything doesn't feel right, try another alternate source. There are many reputable companies in the secondary market, so don't be discouraged if one prospect does not meet your needs. The good news is a reputable source of alternate procurement should be able to fulfill 99 percent of your product requests.

Beware of the "unbelievable" deal
One of the biggest benefits of pre-owned equipment certainly is low price. Equipment prices typically are 50 percent to 90 percent below manufacturers' list prices. But be sure to shop around as prices can vary on each piece of equipment based on supply and market demand. You may find dirt-cheap deals, but beware of the "unbelievable" bargain, especially from an online auction site. If the equipment is offered "as-is," approach with extreme caution. Consider why most carmakers now offer "certified, pre-owned" models as a better bet over purchasing from a private party. Paying a little more, but getting top quality from a reputable company, guarantees authenticity, a lifetime warranty and technical support services that helps avoid a lot of the frustration and disappointment. In the end, do your due diligence and buying from the secondary market can deliver the same peace of mind with heightened post-sale support and lengthier warranties than purchases directly from a manufacturer or authorized reseller.

Expect rapid delivery
As equipment manufacturers often build to order, it's not unusual for buyers to experience weeks of delay in receiving equipment. This can be a precarious predicament for any company that urgently needs networking hardware, because every hour counts. A trustworthy pre-owned equipment supplier should have a substantial inventory of popular products available and usually be able to deliver that equipment the next day. Even hard-to-find products are obtainable in a few days from an established, well-connected source.

Quiz your vendor on quality
Don't hesitate to ask a potential secondary market source about quality assurance procedures. If there are good processes in place, they'll be happy to answer your questions. Ask how serial numbers are validated to prove legitimacy. Is all equipment tested prior to shipment? Check the credentials of the technical staff performing testing and providing support. Secondary market vendors with in-house technical expertise also should be able to ship equipment configured to your specifications—a big bonus over manufacturers.

Demand a warranty to mitigate risk
Buying used networking equipment shouldn't feel like a risky proposition. Secondary market companies that have expert purchasing, testing and shipping procedures will back all purchases with a lifetime warranty and offer extended coverage, including lifetime warranties. In many cases these warranties exceed those offered by the original manufacturer. If a provider doesn't include a warranty, consider a larger or more established secondary-market vendor.