The 50 shades of the enterprise tech gray market


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You can save a bundle of money buying redundant or noncritical gear from the gray market, but a lot of risk is involved

Last week, I dug into a few of the benefits of buying IT gear from the gray market and working with less-expensive support contracts. Although it's true that in working with less-supported (or unsupported) gear you take on a much larger share of the responsibility if things go wrong, you can also save an enormous pile of money.

However, in addition to making sure you have appropriate spare equipment on site and have staffed appropriately to be able to handle failures yourself, you must be aware of the other dangers of working with gray-market gear -- especially when it comes from unscrupulous sources. Knowing what to look for when you're in the market for used tech is incredibly important if you're hoping to cut costs with gray-market purchases.

Unsurprisingly, hardware vendors are not shy about telling you about all the potential evils of the gray market. They claim that broken, misrepresented, incomplete, flat-out counterfeit, and even stolen hardware flood the outlets for used IT gear. It's easy to see why hardware manufacturers aren't jumping for joy when you decide to spend $20,000 on a used switch from a remarketer rather than $80,000 on a new one; if enough people did that (more than they already do), the manufacturers stand to lose huge amounts of revenue.

But the manufacturers' scare stories aren't all wrong; there's plenty of unscrupulous behavior in the gray market. In one of the more memorable cases, in 2008 the Defense Department bought a large number of cut-rate Cisco routers, only to find out that they were counterfeit -- assembled in China and sold with no support contracts and pirated Cisco software. Fortunately, that kind of large-scale deception is rare, but other risks need to be considered when dealing in the gray market, depending on the gear you're seeking.

For example, in the worst cases when buying replacement disks for a server, you might get an inoperable disk, it might die prematurely, or it might not be the right disk. I've seen a few situations where someone had used legitimate Dell or Hewlett-Packard drive sleds once containing legitimate disks. But the disks had died and were replaced with ultracheap consumer disks that couldn't withstand the workload expected of enterprise disks.

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