Ronny Lam

about://tech

Refurbished Networking Equipment

There is a a whole market of used network equipment. This market is in the US only ᔥ around $2 billion.  _place_holder;I bet it is double the amount world-wide and if you also count server-equipment it quadruples.

In this economic down-time it can be very handy to run a company on second- hand equipment. Especially when you can buy twice the amount for what you would normally buy discounted from a vendor. Question of course is what happend to warranty when you buy second-hand, but with prices that low it pays of to have your own spares on the shelf.

Two personal anecdotes support this story

In late 2000, maybe 2001, the internet bubble broke with a dramatic effect. Lots of companies which had invested a lot of money in network and server equipment went broke. The effect was a huge secondary market of (almost) new equipment for pocketmoney. Large vendors and resellers where complaining about this market and almost went broke themselves. They even tried to prohibit us from buying on the second-hand market by denying warranty on their new equipment. It was a hard time for everybody, but I am sure that we got the benefit out of that.

This year I am working with a startup and like every other startup we have to watch our liquidity. And again I find it astonishing what kind of prices we pay for network and server equipment on the second-hand market. We can fill our development environment and lab for less than a quarter of the price of new equipment.

The Moral

The moral of these stories is that in economic down-times not everybody suffers. You can save a lot of money and give your company lots of runway by buying refurbished equipment. This marketplace is huge again. But like every other second-hand market: watch out for stolen stuff.