Today enterprises of all kinds and sizes are united by a common plight — finding ways to maximize the spending power of restricted IT budgets. This need is intensifying as OEMs' equipment prices continue to rise while product lifecycles shrink, forcing companies to seek creative, cost-effective ways to keep pace with evolving technologies.

As a result, more and more end-users are embracing an alternate channel for the procurement of networking gear, whether it is for planned or emergency network expansion, disaster recovery, testing or sparing. Increasing numbers of enterprises have turned to the market for pre-owned networking equipment, which has reached multi-billion dollar proportions and is gaining traction as a credible, reliable source for current and previous generation network switches, routers, IP telephony, access servers and security hardware.

Much of this growth is powered by the fact that most of the popular network devices found in enterprise networks worldwide are available in large quantities — and for overnight delivery — through this channel. Aside from sidestepping the typical six-to-eight weeks of waiting that is common with most OEMs' deliveries, enterprises are realizing undeniable budgetary relief as prices are up to 90 percent less than list.

So it's no wonder the secondary market is gaining momentum worldwide with a variety of enterprises, including service providers, educational institutions, financial organizations, healthcare providers and government entities. In fact, growing numbers of global 1000 organizations and many of the most well-known brands around the world purchase pre-owned equipment for network fulfillment, disaster recovery, testing and sparing strategies.

Still, many OEMs and their channel partners are spreading misinformation about the secondary market in hopes they can dissuade end-users from buying pre-owned equipment. They often resort to implying that equipment sold through the secondary channel is inferior or fake. In reality, leading providers of pre-owned networking equipment have embraced more stringent procedures than most OEMs, VARs and distributors to ensure product quality and authenticity.

By following the guidelines and advice that follows, enterprises will be able to become savvy purchasers in a market that is a welcome source of relief for their budget-challenged IT purchases.
UNDERSTANDING TERMS

The first step any enterprise should take toward ensuring a purchase from the secondary market will be successful is to understand the terms that are used frequently. While it's common to see products referred to as "used," "pre-owned" or "refurbished," these terms are not synonyms. Calling equipment "used" or "pre-owned" may mean it is being sold in as-is condition. In contrast, "refurbished" equipment typically has been put through a full inspection, including any reconditioning necessary to restore the goods to as close to original condition as possible.

Equipment categorized as "new/open box" typically describes gear that has never been used but is not in sealed or original boxes. The caveat here is this equipment can range from pristine to several years old and inoperable — with no assurances. While equipment called "new/in box" usually refers to gear from an OEM's distribution channel with its original tape unopened, who knows for sure?

Whatever the description, make sure the equipment is in excellent working order and meets original performance specifications. While all types of used equipment are for sale from many different outlets at a wide variety of prices, it's best to work only with alternate sources that utilize standard best business practices, including inspection and testing of all equipment before reselling.

Reputable re-marketers make sure the gear has been completely tested, including port- and load-testing, and if needed, refurbished expertly. Secondary equipment providers also typically examine every piece of equipment obtained to make sure all original components, including cards and memory, have not been swapped out for inexpensive and/or inferior replacements.

Additionally, secondary network equipment providers offer the choice of third-party components to produce even greater savings over branded, private-labeled memory or network cards. These generic products should be clearly labeled and presented as third-party equipment, with enticing discounts designed to stretch restricted network budgets farther.

Unfortunately, OEMs often use scare tactics to infer that generic equipment is counterfeit or cloned. Just because generic or pre-owned gear is available for significant savings doesn't mean it's inferior or fake. Rather, generic, economical components can reduce overall network expenditures significantly.

MASSIVE INVENTORIES, EXPEDITED RESPONSE

The best way to find an ideal alternate procurement source is to look for a partner with industry longevity and a solid track record of business success. Leading providers of pre-owned networking equipment maintain huge inventories and most work on a global basis. In the secondary market, inventory is driven mostly by current market demand, so the largest providers have substantial resources and contacts in order to secure readily available inventory of the top 100-to-200 products.

The secondary network equipment market is an ideal source when much-needed equipment cannot be procured easily, quickly or economically from traditional channels. OEMs typically stock a small percentage of replacements for the gear covered by maintenance contracts while retaining volume inventories of only the latest product releases. As a result, locating second-generation or older routers and switches can become a time-consuming and frustrating experience as quantities are often low in the primary channel. However, an abundance of second-generation gear usually can be found in the secondary channel and shipped within 24-to-48 hours.

All purchases of pre-owned equipment should include some duration of guarantee and many of the larger providers offer a standard one-year warranty. Additionally, many secondary market companies have advanced overnight replacement policies and certified technical support, whereas OEMs typically charge extra. Most of the leading secondary marketers also offer around-the-clock pre- and post-sale technical support from certified technicians with time-tested and field-proven experience.

OPTIMAL PROTECTION

Whether looking for extended network capacity, disaster recovery relief or network spares, the secondary channel has emerged as a viable option for exceptional savings and response times. Network outages typically appear unexpectedly, and no matter what level of pre-planning is in place, if the needed equipment does not arrive promptly, a company's current and future viability are at stake. While OEMs and their channel partners may do their best to be accommodating — whether the product request is planned or not — missing the delivery date can have excruciating consequences.

For many resource-constrained organizations, ensuring optimal protection means safeguarding routers and switches at the "network core," leaving the network edge and remote offices vulnerable in the event of a major disaster. However, more cost-effective sourcing strategies can reduce risks by enabling more flexible sparing options while also providing quick fixes to unexpected network problems. The secondary equipment market can provide a wide range of equipment with expedited shipping to maintain maximum network uptime. In contrast, most OEMs typically charge a premium for this level of heightened service.

Hundreds of thousands of pre-owned products await delivery, so most requests can be verified instantly. If a product is not available, most providers have excellent contacts to enable fulfillment in a matter of days. As growing legions of secondary network market advocates already have discovered, buying pre-owned, refurbished networking equipment is an increasingly viable and legitimate choice. ENS