Why Buy New When Used Will Do?

By SmallBusinessComputing Staff | Posted July 10, 2002
By Drew Bird

With the dot com bust, there is lots of used networking equipment out there, and you can save bucks by buying 'not quite new' equipment. Although the dust has largely settled from that little implosion, not too much has changed in the business environment, and companies are still feeling the squeeze from economic forces, market factors and other business related challenges (did someone say accounting scandal?).

In the same way that there are bargains to be had with networking equipment, the same holds true of storage networking equipment such as controllers, tape drives, hard disk arrays, NAS devices, Fibre Channel equipment and so on. For those still in business and looking to implement or upgrade networked storage solutions, this all adds up to one thing. Previously cared for network storage hardware at discount prices.

Finding a source for used storage network hardware is an essentially simple task. Typing 'used storage networking equipment' into an Internet search engine will yield a list of companies who act as a marketplace or clearinghouse for used IT hardware. In straight terms this simply means that they buy surplus hardware from companies who are downsizing, liquidating or upgrading. One of the leading companies in this market is ITParade.com, Inc., a clearinghouse for IT equipment who operates through a network of dealers.

"Most of the high-power, high-dollar equipment comes from downsized telecom firms, ISPs, and financially distressed corporations. They invested heavily in IT during the late 1990s boom, and now their surplus is helping to fuel the growth of the secondary market," says Robert Davie, ITParade's executive vice president and founder.

Of course buying used equipment does have additional considerations over buying new. By far the most popular concern is the warranty coverage. With much of the equipment costing at the very least thousands of dollars, this is valid. To cater to this, companies like ITParade go to great lengths to ensure that you don't get saddled with a SAN lemon.

Davie explains that the relative newness of the hardware and its light previous use means that most original warranties still hold. In the few cases when equipment is out of warranty, it is possible to obtain service, parts, etc. through the manufacturer or through ITParade's dealer network. Since many of ITParade's participating dealers also refurbish or remanufacture the equipment they sell, additional warranties for up to 90-days are often available at no extra charge.

The good news for buyers is, as with other networking equipment, if it works when it arrives and for the first 90 days, then chances are that it will outlive any normal warranty period offered by a manufacturer. There are always exceptions to this, but in dollar terms it may be a risk worth taking. There is certainly no reason to believe that you are at any greater risk from failure with a used piece of equipment than a new device direct from a manufacturer.

With the warranty issue addressed, the next question potential purchasers have is invariably how much money can be saved by buying used equipment. The answer is quite a lot. Because companies (or the liquidators) are often selling the equipment to recoup cash, they are normally in a relative hurry to get rid of it, and favor bulk deals with the clearinghouses who end up with large amounts of equipment at a big discount. "All of this adds up to major savings for the new owner," says Davie. "Depending on the equipment, buyers can typically expect to save 60 to 70 percent off the original list price, and 30 to 40 percent off the street prices."

So we have established that warranty should not be an issue, and teased you with savings that could amount to thousands of dollars, but will you be able to get the equipment you need? Probably. To get some idea of just the kind of equipment is available on the used market, ITParade's inventory currently includes Adaptec controllers, EMC, Symmetrix, and Clariion drives and modules, Exabyte tape drives, Hewlett Packard SureStore Tape Libraries, HP FC60 arrays, HP XP equipment, IBM NAS200 systems, DLTape Libraries, Fast T2000 systems, Netfinity EXP equipment and Sun StorEdge T3, A5200 and A1000 systems to name a few. Different equipment arrives all the time and many brokers are able to provide a service by where they will actively look for a piece of equipment you need.

Although some companies may have reservations about buying used equipment, clearing houses like ITParade are quick to point out that this isn't just a garage sale for corporate hand-me-downs. "Top-end hardware at rock-bottom prices is what the secondary market is all about. But it's not a flea market or a fire sale! Corporate users can haunt auction sites or surplus markets and find cheaper deals, but companies like ITParade provide a professional marketplace for pre-owned IT," says Davie.

In some cases, buying used is actually a more viable option than buying new. For example, if you want to replace a failed 18 month old device with exactly the same type and model, thereby eliminating the need to reconfigure a system, you may well have a better chance of finding the exact same device in the used marketplace than by trying to track down a reseller or dealer who has last years model still on the shelf.

With all this said, there are still risks associated with buying used equipment, just in the same way as there are when buying anything else used. If you are uncomfortable with a short or non-manufacturer warranty, or have concerns about how equipment may have been treated, buying used may not be for you.

There are also other considerations. If you are unfamiliar with product ranges and applications, or you have a large purchase to make and want the reassurance that a schmoozing from a manufacturer or large reseller brings, you are best to stick with that route. If you know what you want, and want to save a (good) few bucks getting it, then buying used equipment might be a way to get more storage networking bang for your buck than you ever imagined possible.

Reprinted from enterprisestorageforum.com.

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