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Report: Used Network Equipment Sales Thriving
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April 23, 2009

Report: Used Network Equipment Sales Thriving

By Vivek Naik, TMCnet Contributor


United Network Equipment Dealer Association (UNEDA) reportedly has announced its annual survey results for 2008, with used network equipment revenue at nearly $2.5 billion, translating to a 6.5 percent share of the total networking OEM market.

 
Nearly 67 percent of respondents said they saw an increase in business in 2008 from 2007, with companies ferreting for cheaper hardware and easier maintenance deals, and more than 75 percent say they're confident of increased business in 2009, even though the recession has slashed IT spending.
 
"The results of the UNEDA membership survey indicate a bright spot in an otherwise down economy as well as an awaiting marketplace solution for budget-challenged network managers and cost-conscious CIOs,” said Corey Donovan, UNEDA member, and Vice President of Operations of Vibrant Technologies (News - Alert).
 
More than 50 percent say that since companies are refraining from buying product upgrades and investing in network migrations they are demanding second hand spares and guaranteed repair back-up for all pre-owned asset purchases.
 
"This landmark survey offers an important snapshot of a thriving market segment that is continuing to grow despite the downturn in the economy,” said Mike Sheldon, president of the board of UNEDA, and president and CEO of Network Hardware Resale (News - Alert). “Now more than ever, companies are turning to the secondary market and UNEDA member companies to stretch their IT dollars farther.”
 
Other important reasons for companies to continue buying used equipment were because of UNEDA members’ responsiveness, product availability since UNEDA members annually keep $1 billion readily deployable inventory, rapid delivery that can be made overnight by 98 percent of respondents, cash savings that sometimes touch 90 percent of original listing, and demonstrated willingness by more than 90 percent to do business all over the world.
 
More than 40 percent of respondents claimed business in 2008 came from larger enterprises, financial services companies including banks and insurance companies, and first time customers, and said that they sometimes received 20 repeat orders through the year.
 
“The high percentage of repeat business underscores the fact that UNEDA members have become trusted, alternate sources for the most economical, top-quality networking equipment,” Sheldon said.
 
The most popular makes, claim 97 percent of respondents, for routers and switches were Cisco, Juniper, Nortel, Extreme Networks and Avaya, and the most popular Cisco (News - Alert) equipment bought and sold were 2800 Series Routers, Catalyst 6500 Series Switches, Catalyst 3750 Series Switches and 7200 Series Routers.
 
The top challenges faced were fighting OEM Fear, Uncertainty and Doubt propaganda and addressing Cisco SMARTnet issues. Looking forward, UNEDA is targeting improved relationship with Cisco, improved housekeeping for existing inventory, more transparent understanding of legal issues regarding software licensing, and creation of an independent counterfeit task force.
 
“Concerns about counterfeit equipment, mostly throttled by OEM FUD, are clearly drowned out by UNEDA members' focus on highly ethical business practices, which has led to $2 million in combined annual sales,” Donovan said.
 

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Vivek Naik is a contributing editor for TMCnet. To read more of Vivek's articles, please visit his columnist page.

Edited by Michael Dinan


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