Cisco's Continuing Strong Demand

Cisco’s recent reporting of record revenues is a good indicator that the demand for networking equipment remains high. More pertinent perhaps is the fact that the company’s quarterly profit surge of 40 percent rode mainly on the strength of product upgrades.

Isn’t it more than coincidental that this strength goes right along with the company’s accelerating timetables for product upgrades? Nowadays it seems de rigueur for a wave of new or improved products to occur every 18 months. Does keeping pace with technology require keeping up with the frenzy of shortened product lifecycles?

Not necessarily, as the price for bleeding-edge technology isn’t always worth it, especially once the costs for training, implementation and standardization are tallied. While original equipment manufacturers often make older products seem like ticking time bombs, many network managers prefer used Cisco gear that has been tested over time and proven in the field. As a result, more and more companies are expanding their production networks or upgrading disaster recovery plans by purchasing familiar, used Cisco equipment that may be only a single generation old.

Instead of buying the latest models with all the new bells and whistles, more frugal and risk-adverse companies can buy used Cisco equipment that comes with a one-year warranty. Whether companies are looking to extend network capacity, configure next-generation services, plan for disaster recovery or acquire network spares, the used Cisco market has emerged as a viable option for exceptional savings and response time.

Proponents of the pre-owned Cisco market know that both current and used Cisco gear is readily available, and much of it is gently used and/or in original boxes. Leading used Cisco equipment providers, such as Network Hardware Resale, ensure all equipment has been fully inspected, tested and reconditioned to return the used Cisco equipment to as close to original condition as possible, which entails cleaning the chassis, replacing necessary components and always putting in new memory.

In an ironic twist, OEMs’ hastened propensity for cranking out upgrades is one of the prime movers behind the rapid growth in the sales of used Cisco network equipment. The continuous blitz of product upgrades from OEMs has flooded the used Cisco market with ample inventories of popular and hard-to-find equipment at highly reduced prices. This supply of used Cisco means companies don’t have to be forced into a constant upgrade cycle if the equipment they already have is working perfectly in their networks.

Major equipment updates can be costly and cause all sorts of training and implementation headaches. So, they should be thoughtfully planned and executed when end-users’ long-term business goals—not the OEMs’—are the driving force behind the technology migration.

As Cisco’s latest financials confirm, product upgrades are good business for OEMs, but they also need to make good business sense for end-users, especially when buying highly cost-effective used Cisco gear is an increasingly viable option. The fact that used Cisco equipment is in such high demand means the word is out that more and more organizations are embracing alternate channels for meeting ever-increasing network expansion and product upgrade needs.

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Mike Sheldon is President and CEO of Network Hardware Resale (NHR), a leading provider of high-performance, used Cisco equipment, pre-owned Extreme and Juniper network equipment. Founded in 1986, the Santa Barbara, California-based organization has been recognized by Inc. Magazine as one of the fastest growing private companies in the United States for four consecutive years. NHR provides global sales and technical support from its California, New York City metro, Amsterdam, London and Singapore locations. For more information, visit www.networkhardware.com/.

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