4 Ways You Can Save Money On Your Next IT Budget

Zeriva Pre-Owned IT Hardware
Fortune 500 IT Solutions without the Fortune 500 Budget
Cisco Buyers Guide
Used Cisco hardware is available through a variety of channels. High demand for these products is thanks in part to a tremendous product expansion and overall Cisco reputation. This growth has resulted in a nearly $12 billion 5 secondary market for Cisco. The secondary market provides thousands of sellers of used equipment and connection with customers of all types.
VARs are authorized Cisco partners, and generally sell new hardware through Cisco’s distribution channels. They also have access to Cisco’s Certified Refurbished product line. This refurbished equipment is certified, and is “relicensed” by Cisco. SMARTnet maintenance is also available through the same authorized channels. There are two disadvantages that the VARs face when selling the Certified Refurbished product: (1) availability is confined to distribution stock, and (2) the expected savings of a refurbished purchase may be nominal compared to what the potential buyer may find on the secondary market.
Pre-owned Cisco, or Pre-owned IT hardware for that matter, is hardware originally purchased by an end-user and resold to another party. The vast majority of this hardware is purchased new. There are a few industry standards to classify the condition of the hardware that is being sold. These standards can include:
Pre-owned equipment typically comes from several sources:
A large percentage of hardware that reaches the secondary market is generated by end of lease terms. The typical lease cycle is 2-3 years, but it is not uncommon to see a new Cisco product available on the secondary market within a few months after initial launch. This potentially could provide a budget break to IT Departments who properly leverage the secondary market. The secondary market is stocked with current and recent generation hardware, but especially so during a slow economic climate due to mergers, acquisitions, bankruptcies, and liquidations. Another reason equipment makes it to the secondary market is because of purchasing errors.
Why buy pre-owned?
In today’s economy and given the inherent longevity and reliability of Cisco equipment, the question isn’t why buy pre-owned, but why not? When you purchase used Cisco equipment from a trusted and reliable used hardware reseller, you gain key benefits:
Given current economic conditions, demand for pre-owned equipment is rapidly growing as network administrators look to reduce overall IT costs. The secondary hardware market brings together thousands of different types of resellers and buying organizations. Buyers include small, midsize and large businesses, Internet Service Providers, telecommunications and utility companies, non-profits, local, State and US government organizations, military institutions, higher education, schools, and any organization whose network administrators are looking to reduce network costs.
Used equipment provides a viable alternative to new – if you buy from an established vendor with a proven track record. In many cases, resellers offer better after-sale support and more robust warranties than manufacturers or authorized resellers.
Misperceptions about used network gear and the secondary market abound. Here are some of the myths about the secondary hardware market – and the reality.
The myth: before buying, many customers were told that used/pre-owned equipment is:
The reality: most reputable resellers only sell used equipment that’s in good condition, refurbished to like-new condition, backed by a warranty and rigorously screened for authenticity.
In many cases, the leading independent resellers’ testing procedures for detecting counterfeit goods are more rigorous than OEMs, VARs or distributors. Most secondary marketers put products through extensive testing to ensure performance and authenticity. They also work with anti-counterfeiting organizations to keep counterfeit equipment out of the secondary market. They work diligently with Federal organizations like the FBI and ICE, a division of Homeland Security, to report stolen equipment. Zeriva uses an extensive testing platform that is 90% automated and computer controlled to ensure consistency.
As for warranties, most secondary market suppliers offer warranties that are either longer or more robust than those offered by manufacturers or authorized distributors/resellers. Some offer lifetime warranties which can include the repair or replacement of hardware within days instead of the typical weeks or months that OEMs offer. Zeriva offers a Lifetime Warranty that is called the Forever Warranty. We will provide coverage for you for as long as you want to keep the equipment in service.
Finally, most reputable resellers offer extensive support performed by highly trained technicians who work with used equipment every day. Pre- and post-sale support encompasses maintenance, repair and even software support.
Again, the caveat – if you’re going to buy used equipment, make sure you work with a reseller with solid credentials, a proven track record and a long-standing reputation for reliability, financial stability and quality.
Gray market products are legitimate products that are sold outside the designated sales channel . It is not counterfeit equipment. OEM’s have tried to marry the terms Gray Market and the secondary market to cause confusion and doubt with end-users. That could not be further from the truth. Used equipment is simply hardware that has been repurposed.
Primarily, gray market equipment exists due to a lack of control by the OEM over their distribution channels. There are a variety of ways that they reach the secondary market:
Counterfeiting is becoming a growing challenge as more OEMs move their manufacturing overseas. All manufacturers are dealing with the challenge of counterfeiting, including luxury goods, clothing, small electronics, etc. While most resellers are legitimate, reputable and have strict anti-counterfeiting policies, others are not. AGMA estimates that counterfeit products account for some 10 percent of the overall IT hardware market. Fortunately, heightened awareness and better access to information are having an impact as organizations join together to ensure the integrity of the secondary market. Keep these tips in mind when shopping for used gear:
While visual inspection isn’t always an option – and it’s important to work with a credible source – look for these indicators that a product may be counterfeit:
How much can I expect to save by purchasing used equipment?
Typical savings are:
Pricing in the secondary market is ruled by the principles of supply and demand. There are situations where pricing for a particular product could see a short term spike. In 2009, after Cisco had drastically scaled back production schedules, the ASA5500 firewall routers saw a large increase in price due to the high demand and limited supply. The shortage lasted around 3-4 months.
Used IT hardware has been a booming business since the late 1960s. Today, the secondary Cisco market is estimated at $12 billion 5 worldwide, serving organizations across the spectrum:
Fortune 500 companies
Depending on the type of equipment you need for your network, the newest hardware may not suit your current infrastructure. In some cases, pre-owned equipment may actually be better suited to your needs by standardizing your current networking environment and reducing your costs.
Benefits of purchasing used equipment from a reputable reseller include:
Simply Put: Greed. There is the short term fear of losing commission and revenue but more importantly the long term fear of losing repeat business to a secondary supplier. Any sales rep worth his salt, regardless of industry, will disparage sales from another competitor. The fear of losing future business to a pre-owned hardware supplier is a legitimate one. Especially when your sales strategy has been centered on the concept of regular refreshes. Is it not funny that the features he/she was selling you on eighteen months prior are now no longer relevant? They discourage you because ultimately, they fear you will see the value in implementing a secondary market buying strategy to replace or supplement new hardware purchases.
There’s never been a better time to buy used/refurbished equipment. According to a 2006 study, the used hardware market for all IT products was over $300 Billion 5 Worldwide. Inventory is at an all-time high because of the current economic environment. If you’re looking to reduce core networking costs and divert capital to other aspects of your IT infrastructure or business, used networking equipment is an effective strategy.
Many OEMs actively create obstacles for buyers of used equipment due to the rapid rise in demand and the emergence of thousands of resellers. Here are some expert assessments of the secondary market:
“Providers of secondary network equipment answer a market need for quality products at reduced costs. Network managers increasingly understand the viability of having an alternate procurement channel. The secondary equipment market is also providing a strong challenge to OEM maintenance and support in terms of quality and cost.”
Eric Goodness, research vice president, Gartner Inc. 1
“Put the secondary-market gear in operation when you have a problem,” says David Willis, chief of research at Gartner…”Same-day service costs about 20 percent more than next-day, so this strategy could cut your maintenance costs…”
Gartner, April 2, 2007 2
“Who’s buying used gear? Better to ask who isn’t. The customers of secondhand equipment range from small businesses operating on tight margins to Fortune 500 companies and global telcos.” InformationWeek, July 7, 2007 3
“It’s a big deal for Cisco since probably 20 percent of their overall revenue comes from SMARTnet, and support and maintenance.” Resales are “totally legitimate, totally legal. Cisco hates it but there’s nothing they can do about it.”
Mark Tauscheck, senior research analyst, Info-Tech itbusiness.ca, May 29, 2007 4
According to the UNEDA [link here] Code of Ethics:
–Certified Pre-Owned: Sold directly by Cisco or a Cisco-authorized VAR.
-Cisco Authorized Refurbished: Equipment restored to Cisco CARP standards.
-Clean Serial Number: The serial numbers does not appear under a Cisco SMARTnet contract.
-New in Box (NIB): Product is in same condition as if it came directly from Cisco.
-New Open Box (NOB): The box has been opened and the product is nearly the same as a new in box product. Sellers should indicate if the inner static bag has been opened to test. All accessories and packaging are in the package (like if purchased new).
-Refurbished: Equipment has been restored to good cosmetic and working condition.
-Used: Equipment has been removed from a working environment and resold (e.g. directly to a user site). The product is operational; however, it comes with no guarantees in terms of cosmetic condition.
The difference between a maintenance contract and a warranty are:
A warranty describes the conditions under, and period during, which the producer or vendor will repair, replace, or otherwise compensate for, the defective item without cost to the buyer or user. Often it also delineates the rights and obligations of both parties in case of a claim or dispute.
A maintenance contract on the other hand goes the extra mile. The primary difference between a maintenance contract and a warranty is the Service Level Agreement (SLA). A maintenance contract is a predefined commitment to perform a service event within a certain time period. In the networking environment there are two primary SLAs that are offered, 8×5 Next Business Day (NBD) and 24 Hour by 7 Day by 4 Hour response after problem determination. Maintenance contracts offer varying levels of advanced hardware replacement options from 8×5 NBD to a 4-hour onsite spares. The options are all available 24×7, where our warranty is limited to 8×5. If there is a component in the networking environment that goes down, and it is critical to the environment it will require rapid hardware replacement no matter what time of the day or what day of the week, that’s what a maintenance contract offers.
A Warranty is going to ensure that the equipment that you buy from us is always backed, and after verifying that the hardware has failed a replacement will be sent, but if the hardware is critical to the operation of the network environment, a maintenance contract can ensure that you have expert assistance immediately.
A variety of services and support are available on pre-owned products. Historically, OEMs deliberately made it difficult to purchase pre-owned equipment by not honoring software upgrades for products bought without maintenance contracts.
To counter this deterrent, many secondary market sellers oblige with comparable, and sometimes discounted services. Options may include asset management, installation/de-installation, maintenance contracts, network monitoring, on-site consulting, pay-as-you-go support and return material authorization (RMA) programs, technical support and warranty programs.
If a purchase is contingent on a company’s return policy, it is best to research the reputation of the seller, determine whether the seller has an established return policy and if so, familiarize yourself with the stated policy. In many cases, reliable resellers usually offer a return policy that covers hardware failures or malfunctions upon receipt. It is wise to determine whether the provider has established processes for detecting and troubleshooting faulty products, offers flexible shipping options and, if necessary, the form of reimbursement (e.g. Refund as original payment).
Depending on the vendor the warranty can range from 30 days to Lifetime*.
*Lifetime – the actual terms of a lifetime warranty by provider. Typical definitions include:
Some secondary market resellers do offer installation (and de-installation) services. Typically, top tier resellers offer installation.
Most resellers accept several different payment options.
1 Sue Hetzel, United Network Equipment Dealer Association Announces Results of First Annual Survey Revealing Aggressive Growth in the Market for Pre-Owned Networking Gear, BusinessWire, July 11, 2007
2 Phil Hochmuth, Cisco takes on ‘grey market’ equipment sales, Network World, April 26th 2007.
3 Andrew Conry Murray, Used Tech Gear: Notes From The Underground, Information Week, July 7th, 2007.
4 Jeff Jedras, Cisco still trying to defend its aftermarket turf, itbusiness,ca, May 29th, 2007
5 Trends in Secondary Computer Hardware 2006 to 2009, AME Research BV, 2006.
For more ideas on saving time and money in your IT department, visit Zeriva’s IT tips.
6 Ways Great IT leaders Get Over Their Mistakes
Employee working with headset in office callcenter
It’s Tuesday afternoon. Since yesterday, your suspicion has grown into a certainty. You’re dealing with a major mess. People are complaining about a serious problem in IT. They can’t get work done. Your staff tells you they know about the situation, but they don’t have any way to fix it. Another suspicion is rapidly growing in your mind: you screwed up. You have to fix some bad decisions. You’re thinking that everyone is going to blame you, and your career is in ruins.
Don’t despair. If you handle the crisis properly, you can not only avoid damage but end up in better shape than ever. There’s no such thing as a manager who never messes up, but managers who deal well with their mistakes are a valuable asset. Follow this six-step plan, and you’ll earn a net gain in trust.
When things are going wrong, your natural impulse is to think of ways it was someone else’s fault. No doubt other people could have done things better, but shifting the blame won’t fix the problem. Even if your mistake was only half the problem, don’t half admit it. Just admit it.
To avoid the blame-shifting impulse, imagine yourself as a higher-level manager with psychic powers, who knows everything that happened and is completely fair. Think of how that manager would assess the situation. Would someone in that situation say you contributed to the problem? Then admit it. Don’t hedge and evade.
How will people react to your admission? You might be pleasantly surprised. Admitting openly to mistakes is so rare that they won’t know what to do with the pile of anger they were ready to unleash. They’ll be relieved that you aren’t looking for a scapegoat. They’ll think that you might be prepared to approach the problem constructively.
Which, of course, you are.
“Oh, no! Not another learning experience!” Failure is a learning tool, but people hate to learn from their failures. Admitting a mistake lets employees and colleagues learn from your failures. They may have followed your advice too well. They may have misunderstood it. You may all have had the same blind spot.
Talk with the other people about what went wrong and why. Now that you’ve admitted your error, you don’t have to dwell on it. Deal objectively with what went wrong, and suggest or ask for ways to avoid repeating the mistake. Maybe communication was poor. A different process might have avoided the mess.
The discussion should give everyone involved a better understanding of the problem. If a similar situation arises again, they’ll know how to handle it so it doesn’t become a major problem.
Naturally, your mistakes are a learning tool for you, too. “Learn from mistakes” is easy to say, but how do you do it? Once again, stepping back and looking at the issue objectively is a huge help. Put it in terms of three key questions:
The problem could have come in at any of these steps. Maybe what you were attempting didn’t make sense. Maybe you chose the wrong way to do it. Or maybe things went off course and you didn’t catch the problem.
Think of a decision as simple as getting to a place and the ways it can go wrong. The trip might be a bad idea. You might take the wrong road. You might need to detour because of construction and get hopelessly lost. Identifying the mistake gets you most of the way toward identifying the fix.
If you’ve reached this point, you’ve made great progress. You’ve admitted the mistake and not been killed for it. You’ve identified what went wrong and talked with key people about how to avoid it in the future. Now it’s time to get down to specific actions to fix it.
Don’t be afraid to ask, “How can we get out of this mess?” We usually make mistakes in areas where we aren’t strongest, and someone else may have a better insight into the solution. At the same time, fixing your mistake is your responsibility. Whatever input you get, you have to decide on the actions that will straighten things out.
There are two aspects to this. First, there are short-term actions to minimize the impact of the error, so that business can get back on course. Then there are more permanent corrections. The latter may include some painful choices. Think carefully about them before making a proposal. Be ready to accept alternatives that could work better.
Now you’re in really good shape. You’ve identified the problem, admitted your responsibility, and taken concrete steps to fix it. Now follow through with everything that needs doing.
You might feel frustrated that others hid behind your acceptance of responsibility. But if you handled the situation well, you’ve improved the chances that others will admit and deal with their mistakes in the future.
They’ll see that it wasn’t the end of the world when you admitted you messed up. They’ll know you don’t think you’re infallible. This will make them feel safer about acknowledging their mistakes. Dealing well with the situation helps to build a culture of trust, where people can admit they’ve made an error and deal with it openly.
This isn’t really a separate step, but it’s part of everything we’ve talked about so far. The faster you deal with a problem you created, the less damage it will do. Don’t be recklessly hasty, but avoid procrastination. This is especially important in recognizing the existence of a problem and admitting your error played a role. Get past that part, and then you can head off consequences that will make the situation worse.
Find More Ways IT Leaders Get Over Their Mistakes
In martial arts, the first thing you learn is how to fall and not get hurt. Management isn’t that different. Follow all these steps when you make a mistake, and you’ll be back on your feet quickly. You’ll earn respect and be seen as an even stronger leader than before.
For more ideas on saving time and money in your IT department, visit Zeriva’s IT tips.