Washburn doesn't have hard data about the number of customers who are buying used vs. new, but says demand for refabbed gear is high enough that supply is starting to become harder to get. "People are extending the life cycle of their assets and are not refreshing as quickly," to conserve capital dollars, so there are fewer used machines on the market.
Big Iron in the mix
Laptops aren't the only equipment that companies are looking at buying used. Duc Tran, manager of the Vertical Motion Simulator Lab at NASA, says he's bought used computers because they are compatible with other lab systems that are no longer available as new.
Specifically, NASA has purchased used DEC AlphaServer ES45s to upgrade and to continue support of the lab's existing DEC servers.
"If the used equipment was not available," Tran explains, then his group would have to spend time and money developing a new solution. "This effort would be fairly expensive."
For its part, the IT department at Georgia Southern University purchased IBM x86 servers, Net Applications' Fibre Channel storage, Cisco switches, routers and hubs, Unix servers and other networking equipment -- all from Canvas Systems, a supplier of used IT equipment in Norcross, Ga.
Timur Mirzoev, assistant professor of information technology at Georgia Southern University, says that the university has not had any problems so far. It's also been a great teaching aide for students, who have done all of the actual installation, configuration and management of the used gear over the past four months.
"I think this is the only way we could afford to teach advanced technology ... with real hands-on experience," says Mirzoev. "In addition to reusing existing equipment, we are also supporting the greener global environment. It's the best choice considering the economy in this state."
Forrester's Washburn adds that the performance of used equipment doesn't have to be any less than that of new equipment. For example, he says, HP's Renew program re-manufactures equipment to be in "same as new" condition and touts equal performance at a 15 percent to 40 percent discount compared to new. And, in fact, the refabbed equipment may have never actually been used because of customer returns, canceled orders and the like.
The numbers can really add up
Steve Hawn, president and CEO of used-gear supplier Frontier Computer in Traverse City, Mich., says that customers who need to upgrade their software in a hurry often turn to used hardware to ease the monetary pain. A new version of an application often requires more hardware horsepower, and going with used equipment can cut the cost of that new hardware by up to 90 percent, he says.
Robert Houghton, president of Redemtech, says that one customer who went the used-gear route saved $9.2 million during a two-year period. The customer, which Houghton declined to name, bought Cisco switches and routers, desktops, laptops, laser printers, and Intel and Unix servers, among other things.
But the strategy is not without risk. Steve Brasen, an analyst at Enterprise Management Associates (EMA) in Boulder, Colo., says the primary challenges of using refurbished equipment are ensuring reliability and dealing with technology obsolescence. "Any piece of hardware that was actively used previously is going to show signs of wear. Even 'refurbished' units, which have typically had replaced or repaired damaged components have been subjected to stress and, therefore, contain unseen wear."