Many IT departments are being mandated to reduce costs, sometimes over 30%, without sacrificing on service levels. Since many IT budgets are already “lean and mean” as a result of the 2002-2003 downturn, IT managers are faced with unattractive options, like reducing headcount or abandoning strategic IT projects.
On the other hand, the businesses downsizing or going bankrupt have a lot of IT equipment that is being liquidated at fire-sale prices to satisfy creditors and the courts. This glut of slighty-used hardware has created downward pressure on prices of refurbished hardware in the open market.
“...in light of the capital crunch, some larger companies are starting to take a second look at buying used IT gear” -- BusinessWeek.com, New Rage at Work: Used, Revamped IT Gear, 11/03/2008
The built-in redundancy of IT equipment, in addition to IT departments and infrastructures, have greatly reduced the cost of failure if something goes wrong with hardware. Replacing systems, in addition to I/O components, storage, and memory, with refurbished equipment, is now less risky even if something does go wrong, because it is rare that the incident would bring the entire system down, and even if it did, it may just impact application performance.
In addition, information technology hardware manufacturers are making servers, switches, routers, and storage more durable and dependable than ever before. Coupled with the fact that many applications have not been retooled in response to hardware advances like multi-core processors, “new to you” IT equipment has never been more attractive than it is right now.
The tech sector is not immune to economic cycles, and acts accordingly when they need to “goose” their balance sheet or income statement. A common way to increase revenue quickly is to make maintenance unaffordable for 2nd and 3rd generation hardware. They hope that in doing so, they can force an upgrade, even if their customer hasn’t maximized the lifecycle of the equipment.
In addition, these manufacturers oftentimes fail to provide fair prices on trade-ins if they offer any price at all. This leads to companies with huge inventories of perfectly good hardware that they don’t know what to do with, simply because they were uneconomical to keep on maintenance.
IT equipment vendors, like many manufacturers, have embraced “lean” and “just-in-time” efforts. These efforts, coupled with the channel complexities that routes hardware from the manufacturer to the distributor, to the partner, and finally, to you, lead to unacceptably long fulfillment cycles and lead times.
If you’ve read any of the recent articles on the rise in companies sourcing refurbished IT gear for various purposes, you’ve no doubt heard the warning to watch out for unscrupulous vendors. North American Systems has been in business for over 15 years, has a Dun & Bradstreet number, and a variety of reference accounts we can provide on demand.
We are also authorized with a number of vendors, including hardware providers like IBM & Cisco, as well as software vendors like VMware & Oracle. We stand behind all of our parts, and are committed to selling only genuine equipment. All hardware that enters our 25,000 square foot headquarters has serial numbers cross-checked, and then is tested & staged before shipping.
Reputable and Credible
Manufacturers and vendors plant the seed of uncertainty by calling product sourced outside their authorized channels to be “gray market” and warn against counterfeit products.
At North American Systems, we stand behind all of the hardware we offer, committing to selling only genuine parts to customers. All hardware that enters our 25,000 square foot headquarters has serial numbers cross-checked, and then is tested & staged in our 8,000 square foot technical area before it ships.
In addition to offering standard warranties with all of our products, we guarantee that hardware you source from us will fall under the manufacturers maintenance contract. We will support the product during the “burn-in” period manufacturers sometimes use to delay the certification of this equipment.
There are a variety of sources we can get our genuine products from, including equipment that has reached end-of-life for our end-users, which we offer to buyback at a fair market price, or take in for trade-in credits.
This allows our end users to continue to use hardware that may have reached the vendor’s arbitrary “end-of-life” (EOL) or “end-of-support-life” (EOSL) stage. For equipment which is still perfectly good, but may have reached “EOL” or “EOSL” status, we can continue to provide you with upgrades and replacement parts, and even keep the hardware under maintenance through our independent maintenance options.
We don’t just offer “old” hardware either, we can provide you with cutting-edge equipment at deep discounts, and faster fulfillment times than if you source from these “authorized” channels.
Big-time equipment manufacturers have been pushing resellers and partners to focus on providing solutions, not just hardware. By pushing for solution providers, they can prevent price wars from happening between partners, which could cut into profit margins, and ensure you don’t get the best available price.
Manufacturers want existing business partners to build a “relationship” with their end users, and oftentimes provide preferred pricing to incumbent business partners, discouraging price competition. This methodology attempts to push end-users to bundle services, software, and hardware to distort costs. This lack of pricing transparency may be beneficial to extremely small IT shops, but not sophisticated IT departments that want to leverage the skills of their IT staff.