Used Servers - Black, White or Gray Market?
Corey Donovan - Vibrant Technologies
This week's article is on the used server market, its portrayal in the marketplace and what to look for in a used IT hardware reseller.
In the field, the word "gray market" is typically thrown around with disregard for it's real meaning (product acquired from an overseas channel at lower prices than said product is provided in the local channel) in order to spread FUD. Some reps will even go as far as to refer to used IT hardware as "black market" or stolen/counterfeit equipment.
The truth is that if you're dealing with a reputable dealer, the product is probably as "white market" as a bake sale. Of course, you have to protect yourself and make sure you're working with a trusted vendor. Guidelines for feeling out a remarketed vendor are listed at the bottom of this article. First though, consider the following:
The manufacturers and distributors of the world (Sun, HP, IBM, etc...) would like you to believe any of the following scenarios regarding open market used versions of their products:
- The system was stolen
- The system is a counterfeit from overseas
- The system was a reject
The truth is likely any of the following scenarios:
- The equipment was traded-in from another user who gently used it and had it under maintenance with the manufacturer.
- The equipment has come off of a lease and been redistributed out to the open market (any where from 3 months to 3 years).
- The equipment was thoroughly tested and updated to the manufacturer's specifications before shipment.
There certainly are some slim shady dealers out there (a tiny minority), so it makes sense that the manufacturer's want to protect the users from them, although I suspect the manufacturers want to protect themselves from losing a deal for their brand new solution. So, how do you tell the wheat from the chaff?
- Do your due diligence - Check references, check BBB listing, years in business, etc...
- Ask if the reseller can put the following in writing on your quote and eventually on the signed purchase order:
- All hardware is (XYZ manufacturer) original equipment.
- All hardware is guaranteed eligible for the manufacturer's maintenance.
- Ask whether the licensing will be an issue.
- Some manufacturers require recertification or new licenses in order to acquire maintenance and/or software.
- Get credit terms if you can.
- Corporations of any decent size should be able to negotiate payment terms of up to 30 days. This basically gives you the opportunity to try before you buy. If the equipment doesn't meet your standards, you can return it without trying to recover your payment. If the first three precautions are taken, you shouldn't have any surprises, but it doesn't hurt to be cautious (and get on credit)!
While there are sharks out there, manufacturer's will over-hype their presence but these tips will help you navigate through the calm waters of the used IT marketplace.
Used Servers, Storage and Networking reseller
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More Articles by Corey Donovan - Vibrant Technologies © 2011-05-02 Corey Donovan - Vibrant Technologies