Hardware Today: Pre-owned Server Purchasing Strategies Page 2

By Drew Robb (Send Email)
Posted Jan 31, 2005

Beige or Lemon?

Most refurbished servers come in two metaphorical colors — beige and lemon. Therefore, organizations that buy second-hand equipment must pay attention to what they are buying, as they face greater risks than those that purchase brand new hardware. No doubt, there are stories similar to those in the automotive sector: A sys admin buys a used server from a dealer, and before he even finishes configuring it, it breaks down.

"Some small businesses see second-hand servers as a good deal but may suffer later on," cautions Clive Longbottom, an analyst with U.K.-based Quocirca, Ltd.

Here, then, are some do's and don'ts for those considering the used market:

  1. Avoid second-hand outfits that don't offer at least a 90-day warranty. Lemons generally show up within the first few days, so 90 days gives you as much cushion as you probably need.
  2. Check vendor history and customer references. If your vendor can direct you to several of your peers, and they are happy with the service, you are on solid ground. There are plenty of reputable outfits out there, a few scoundrels, and a host of Johnny Come Lately's, which have the best of intentions but may lack the ability to deliver.
  3. Deal with vendors, not brokers. Used equipment vendors typically advertise their existing stock and prices on their Web site. When you call, they can tell you with confidence that what you need is in stock and ship it the same day. Not so with brokers. They may think they have the model you need, but as they have to go through intermediaries, you may end up buying something they can't deliver.
  4. Deal only with knowledgeable individuals. The sales people you deal with should be familiar with basic server terminology and should demonstrate knowledge of the industry. If not, find a vendor you can talk to intelligently.
  5. Don't bet the company on second-hand gear. It stands to reason that you don't load your main database or core applications on a refurbished server. Pay a few hundred (or thousand) dollars more for a new one.
  6. Check origin. Highway bandits occasionally hijack a truckload of brand new servers, and thieves are on record as having snatched some boxes from the server room and waltzed straight out the front door. So verify the origin of the server. If you buy stolen goods, you could lose the equipment as well as the money you paid for it.
  7. Pay attention to software. Pirated software is the last thing you want to inadvertently purchase. Check the licensing of any software included with the hardware. Some vendors may try to sweeten the deal with illegal copies of operating system and application packages.

Server of Your Dreams

Used car makers are getting smart. They target Lexus wannabes with messages like, "Buy the car of your dreams at a price you can afford at a pre-owned Lexus dealer." As configurations are always being upgraded, however, it is unlikely that you will be able to purchase the server of your dreams on the second-hand circuit. But good deals are available if you follow the cautions above, and don't expect state-of-the-art.

The question is, will such deals remain a fixture or will they gradually fade away? CCS's Foley sees a tighter market ahead.

"The quantity and quality of used servers has worsened recently," said Foley. "We used to get a lot of one-year-old models, but most these days are in the three-to-four year bracket."

Longbottom thinks potential customers will soon gravitate more toward commodity Intel boxes.

"As commodity items drop in price, the second-hand market will struggle," he said. "Refurbished Unix servers may become increasingly attractive, however, as that platform starts to fade more from the mainstream."

In contrast, Technorex's Petrova sees a more hopeful future.

"The used server market is increasingly dynamic," said Petrova. "Companies are now getting back to the three-to-five year server refresh cycle, and that means plenty of refurbished business lies ahead."

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