Tight Economy Renews Interest in Used IT Equipment

By Charlene O'Hanlon  |  Print this article Print

Dealers in refurbished computer and networking gear are seeing business increase as solution providers and end users go bargain hunting for "slightly used" and "new to you" equipment.

Albert Einstein once said, “In the middle of every difficulty lies opportunity.”

In the middle of this difficult economy, the opportunities are less apparent for some solution providers. Others, however, see an opportunity in a dearth of new IT equipment purchase by corporations downsizing, closing offices and merging with other companies.

Solution providers who specialize in refurbished equipment are seeing signs of real growth in 2009, thanks to an abundance of nearly new IT equipment entering the product stream coupled with slashed IT budgets.

“This economic environment has changed the perception significantly,” said Mike Sheldon, president and CEO of Network Hardware Resale, a used networking equipment reseller based in Santa Barbara, Calif. “In the last 12 months we have been able to get basically every conceivable product out there. Many are brand new and most are less than a year old. Buyers can get some pretty good deals.”

Buying used IT equipment traditionally is somewhat stigmatized. At first thought, it can be a lot like buying a used car – once you drive it off the lot, it becomes your problem. But that’s not the case with slightly used IT equipment, used IT resellers say.

“If you look at a server, for example, the only things that move are fans and disk drives. Everything else is solid-state,” said Garry Seaber, president of Network Systems Resellers, Littleton, Colo. “Plus, the mean time is extremely long; otherwise, vendors would have a real image problem. Imagine how a customer would feel if they spent all this money on a new server only to have it fail a year later?”

Buying refurbished, he said, offers companies technology that is on track with or only slightly behind the technology innovation curve.

“We are a consumption-oriented country. We all want the latest cell phone, right? And that mode of thinking sometimes does come into play when IT execs are making the decisions,” Seaber said. “But if you look at the applications, they aren’t changing as fast as the hardware. Running a database on a dual-core or single-core can still provide the response time they need on that application; they don’t need a quad-core – it doesn’t make that much of a difference. It comes down to other architectural things on a server that impact the response time, like the disk drive, for example.”

Corey Donovan, vice president of operations at Minnetonka, Minn.-based Vibrant Technologies, agrees. “It’s a good opportunity for buyers now. Prices are lower than they have been since the dot-com implosion with a lot of up-to-date equipment.”