Survey: Used Networking Gear Sales Spike
UNEDA, an alliance comprising more than 300 used networking gear providers worldwide, polled its members and found that the weak economy is fueling sales of preowned equipment. According to the survey, two-thirds of UNEDA's members found that business improved in 2008, with members reporting combined annual revenues of more than $2 billion.
In addition, 76 percent of used networking equipment dealers queried expect business to increase in 2009, despite a downturn in overall IT spending. Top used products include preowned routers, switches, access servers, security products, VoIP phones and telephony products. Used dealers are also seeing a spike in business from large enterprises, financial services firms, banks and insurance companies.
The survey revealed that more than half of the respondents realized an increased supply of, and demand for, preowned networking gear, along with an increased need for alternative maintenance and growing demand for spares due to delayed product upgrades and network migrations.
More than 40 percent of respondents said business increased from larger enterprises over last year and said companies are turning to preowned equipment because of responsiveness, product availability, rapid delivery and savings over OEM pricing, which can reach up to 90 percent off list prices.
The survey also found that 42 percent of members have a high percent of repeat business, with customers buying more than 20 times during the year. The main use for preowned network gear is network expansions, while other key uses include production network, network sparing, testing and disaster recovery planning.
Interestingly, more than 97 percent of users surveyed buy and sell network routers and switches from Cisco Systems, despite the San Jose, Calif.-based giant's strict policies governing secondary market sales. Following Cisco is Juniper Networks, Nortel Networks, Extreme Networks, Foundry and Avaya. On the Cisco side, the most popular gear bought and sold on the secondary market includes 2800 Series routers, Catalyst 6500 Series switches, Catalyst 3750 Series switches and 7200 Series routers.
One of the major sticking points against the secondary market is fear of counterfeiting. According to UNEDA, over the past year, 60 percent of members surveyed reported a drop in the amount of bogus gear they've identified and intercepted. Regardless, respondents said identifying counterfeit gear is one of the top three toughest issues they face as a secondary market provider.