September 2012

Purchasing Pre-Owned IT Equipment

Seven Key Criteria for Purchasing Pre-Owned Equipment for Your Organization

By: Maryann Von Seggern, Cisco Capital

All types of organizations are relying on extremely sophisticated network architectures to transform their company and stand out among competitors. However, with the complexities of these constantly evolving networks, IT managers are discovering they are facing new IT challenges.

Managers are facing changing demands, including the need to deliver new services and maintain multiple generations of existing infrastructure, all while optimizing their IT investment. With today’s constant economic pressures and increased operational costs, refurbished equipment can be a reliable way for organizations of all sizes to keep pace with the latest technologies without the stress of increased expenses.

Despite common misconceptions, used equipment and refurbished equipment are not one and the same. Although both terms suggest former ownership, refurbished equipment complies with quality standards, often with the same manufacturer’s warranty that comes with the purchase of a new product.

Although refurbished equipment is frequently backed by strict standards, each vendor may use different parts, processes, levels of rigor and quality-acceptance standards to refurbish equipment.

Purchasing managers and IT decision makes have multiple variables to consider when purchasing pre-owned equipment. The total cost of long-term ownership is dependent upon having a comprehensive understanding into the variables involved in proper refurbishment, its contribution to equipment reliability, and the different processes and procedures among each vendor.

Sacrificing on the quality or brand will eventually take a toll on the professional support staff and IT infrastructure. Below are seven criteria to consider before purchasing pre-owned equipment so organizations of all sizes can maximize the value of their IT investment while minimizing risk:

1. The pre-owned equipment has been fully refurbished to factory specifications.
Much of the functionality of advanced networking equipment is software and firmware driven. Used equipment, when refurbished properly, is updated with the current versions of firmware and software and tested to confirm that the equipment is operating within the product specifications, ensuring reliable operation over the duration of the intended product lifespan.

2. The equipment is backed by the same warranty, vendor maintenance and support options as the equivalent new product.
When buying used equipment, it is important to look beyond the price tag. Confirm that the refurbished products have a warranty and maintenance program. This way, should the equipment fail, it will be under the same level of protection as new equipment. Nothing can be worse than buying a piece of equipment at a bargain price only to have it fail shortly after it is installed and having no recourse other than to purchase yet another solution, doubling your costs.

3. The equipment has been purchased from original manufacturer, the best choice to properly refurbish equipment.
Refurbished equipment purchased from the original manufacturer will ensure that the equipment is backed by original policies, including warranty options. In addition, the manufacturer will be aware of integration and upgrade issues that may have occurred over the life of the product and be able to provide solutions. Individuals and resellers that are not certified by the manufacturer may not have the ability to confirm compliance with engineering standards and may inadvertently introduce damaging software to the system. In addition, some resellers sell equipment without valid software licenses or product warranties, making the equipment ineligible for support or updates.

4. There are no hidden fees.
The sales price should reflect the value of the refurbished equipment taking into consideration the functionality of the unit, as well as the parameters of the license agreement and warranty. Some resellers will make necessary upgrades, charging high premiums, eliminating the cost benefit of purchasing refurbished equipment.

5. The reseller is OEM-authorized.
For additional savings, always source your equipment and support services directly from authorized OEM channels or the manufacturer directly. Resellers who are OEM-authorized provide technical expertise and access to products, promotions and financing.

6. The remanufactured products are certified.
Without assurance that your equipment is loaded with the latest firmware and software, organizations are increasingly vulnerable to attacks. Companies who decide to purchase equipment from a reseller who is not certified may not have access to the most current patches and updates, causing downtime and maintenance issues, potentially resulting in a loss of hardware and data. Additionally, some uncertified equipment may not be compliant with certain regulations and directives, such as the Restriction of Hazardous Substances (ROHS).

7. Prices are not “too good to be true.”
Heavily reduced costs may be an indication that the products are counterfeit or not authorized for sale where they are being offered. The potential risks—to your business and network security, as well as legal and compliance risks—may end up costing far more than any initial cost savings. Especially when buying equipment that is critical to network integrity and business continuity, it’s important to select a source only after a careful evaluation. Resist Internet, email, or telemarketing offers that will send representatives to pick up your payment in person or demand cash-on-delivery shipment.

When the equipment you’re buying is business-critical, quality and authenticity should be your most important considerations.

Properly refurbished equipment is an attractive option for purchasing decision makers faced with tight budgets who nevertheless need to address increased network security concerns, stronger compliance guidelines, or service and support challenges.

Doing sufficient research on the reputation and service of your IT vendor will safeguard a reliable, refurbished system that is inspected and backed by a warranty, helping to ensure that your network stays up and your business runs smoothly.