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Network Hardware Resale Reports Continued Momentum in the Secondary Market as Companies Increase Spending & Adoption of Alternative Maintenance Services

April 20, 2010

Nearly 1,200 North American Organizations Reinforce Growing Trend to Leverage the Secondary Market for Production Network Equipment Purchases and Technical Support

Network Hardware Resale ─ Santa Barbara, Calif. ─ April 20, 2010

News Facts

  • Network Hardware Resale (NHR), the leading provider of pre-owned and new networking equipment, has revealed the findings of a recent market survey of nearly 1,200 North American companies that purchased refurbished network equipment and alternative maintenance services over the past year.
  • The survey results demonstrate sustained market momentum, as nearly 40 percent of the respondents reported an expected increase in purchasing pre-owned network equipment in 2010. Nearly 80 percent of those polled already use equipment purchased from the secondary market in their production network environments while 61 percent are fueling network expansions in this fashion.
  • The top five reasons cited for relying on an alternative procurement channel for network equipment are savings over OEM pricing, product availability, responsiveness, rapid delivery and warranties.
  • The survey reinforces the continuing trend of seeking alternative maintenance services. Nearly 40 percent of the respondents currently protect only core network equipment with Cisco SMARTnet maintenance. Additionally, 31 percent of those surveyed will or have eliminated maintenance on some hardware to save money while nearly a quarter will or already have replaced SMARTnet in favor of more cost-effective options.
  • Despite recent reports of widespread component supply shortages and lengthy equipment delays hindering Cisco’s primary channel, current and previous-generation network equipment can be readily found in the secondary market.

Setting the Standard for Quality, Responsiveness and Meeting Delivering Commitments

  • More than half of those polled purchased pre-owned equipment from NHR up to five times in 2009, while more than a quarter made up to 10 purchases. The company received high marks for satisfaction across all categories, including product quality, responsiveness, tech support and ability to meet delivery commitments.
  • In polling customers of NHR’s NetSure™ alternative maintenance, the survey revealed high satisfaction levels in terms of pricing, responsive technical support, overnight equipment replacement, the ability to add maintenance where it wasn’t economically feasible previously as well as the ability to support gear not purchased from NHR.
  • NetSure outpaced SMARTnet in all satisfaction categories, including problem resolution, technical expertise, replacement availability, responsiveness and price.
  • The survey underscores an upward buying trend from larger organizations as more than 36 percent of the respondents represented companies with more than 1,000 employees and 55 percent were from organizations with revenues ranging from $26 million to more than $500 million. Expanded participation from companies in the banking/financial services and healthcare industries was revealed, along with continued traction among the high tech, telecommunications and education sectors.

Supporting Quotes

Mike Sheldon, President and CEO, Network Hardware Resale:

  • “Over the past year, demand for NHR’s hardware and maintenance services has grown significantly as organizations around the world strive to maximize the value of their technology investments. NHR’s latest findings solidify our sustained market traction and provide useful insight into how companies have weathered the economic storm by returning repeatedly to the secondary market for exceptional deals backed by outstanding warranties and highly responsive technical support.”

Eric Shapiro, CFO and CIO for Total Health Care:

  • “Turning to the secondary market was a wise business decision for Total Health Care. With this alternative procurement strategy, we’ve been able to effectively address our toughest network challenges, which include ensuring uptime, achieving network redundancy and maximizing our budget.”

Charles King, president and principal analyst, Pund-IT

  • “The fact that the market for pre-owned networking equipment is continuing to gain popularity is not surprising. The past two years have been brutal, with virtually every IT budget under duress. Given the potential price savings, equipment availability and immediacy of delivery, it’s no wonder that the alternative of used gear is catching more people’s attention.”