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Does used equipment make sense -- even in this economy?

One constant we face in IT is ever tightening budgets. One way to ease the financial pain is by purchasing used or refurbished equipment rather than new. Is it a good option or not? Read on and take the poll.

One constant we face in IT is ever-tightening budgets. One way to ease the financial pain is by purchasing used or refurbished equipment rather than new. Is it a good option or not? Read on and take the poll. 

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When economic times start to get bad, organizations scramble to tighten the belt. Layoffs happen. Budgets get cut. Projects get changed or canceled. In many organizations, one of the things that gets hit first and hardest is IT.

Many organizations still view IT as a necessary evil, not an intricate part of the organization. IT is a cost center with head count and budget that is normally never tied to revenue, and thereby merely dilutes per-capita revenue. When it's time for cutbacks, you know where they're going to come from first. And when times get better, don't count on the money spigots to open widely either.

Much like Oliver Twist, we're always asking the CFO: "Please sir, may I have some more?" The response we get is usually the same one that he got. So we make do and try to figure out how to stretch the last penny out of our budget.

One way to stretch the IT dollar is through the purchase of refurbished or used equipment. For example, let's say you've decided that a branch office needs a new router and you've settled on the Cisco 1841. You can get one new from Tiger Direct for $2,099.99. Alternatively, you could go to eBay and pick up a "new" one for $1,471.99 and a used one for as little as $569. If you went for a refurbished unit, you could get one for as little as $1,282.50 from a place like nuLime.

What's the best choice?

Buying new is the easiest choice. You know you're getting a piece of equipment backed by a solid vendor and a warranty that will back it up. Equipment fresh out of the box probably works well, and if not, you can quickly get it fixed or replaced.

Purchasing used equipment is much like buying a used car. You don't know much about the product other than what the seller's going to tell you. Chances are you're buying someone else's problem. There's probably no warranty backing up the product. But there is that low, low price to consider.

Refurbished equipment is somewhere in the middle. Someone had the product before you did, and something went wrong. They returned it, and it was checked out, fixed if possible, and reboxed up. Now it's yours. You're DEFINITELY buying somebody else's problem, but chances are whatever the problem was before with the specific unit, it's OK now. Often there's a warranty to go with it.

In the places where I worked in IT, we always bought equipment new. I don't think we ever purchased used or refurbished equipment. However, I've read that many companies have had success and saved lots of money by going those routes. I suppose it's just a matter of how tight your budget is and how risk averse you are.

What about you?

I wanted to see what the TechRepublic community felt about used and refurbished equipment. Is it an option? Even in a lousy economy such as this one? Or will you only trust shiny new stuff on your network? Take the poll below and sound off in the Comment section.

40 comments
richardp
richardp

We did recently purchase a refurbished RS6000 as a cost effective backup to an aging server still in use. If the old dog goes out, then we can be back up in a couple of hours. (Time is money...)

richardp
richardp

You work with what you've got. Get the best you can with your budget, particularly at critical points. Remember that down time costs the company money!

cbermudez
cbermudez

yes we buy refurbs equipment for end-users.

JamesRL
JamesRL

Even though I am capable of building a system from scratch. I have bought an eMachines refurb from Tiger direct, and its still going strong 4 years later. Since then I found a guy who buys palletloads of offlease Dell Precision workstations. These are machines designed for heavy duty as CAD machines - they have dual XEON processors (like servers) good powersupplies and are generally high quality units. He buys them when they are turned in after a two year lease. Trust me they are rock solid and a pretty good bargain too. I generally upgrade the video card and sound cards, but these have been solid gaming machines for me, which never break. I've seen his setup, he has a double car garage full of computers, stacked about 8 high. He breaks them down, cleans them up, and tests them for 24 hours before selling them. He does not use the original HD however, which in my mind is a good thing. I can't build a comparable system for anywhere near the same price. James

NickNielsen
NickNielsen

Most of my printer support parts, as well as the laptop upon which I now type, are refurbs. A new fuser costs $250-$275, a refurb costs $150, and both have a projected life of 300K pages. The initial choice is easy. Stuff does happen. I have one printer model (three printers total) that has eaten eight fusers in the last six months, all of them refurbs and all under 10K pages. Today, I attempted to install a maintenance kit in a different model printer, but was unable to completely install the fuser because the chassis was bent. (What exactly does a refurb tech look for? In this case s/he/it missed it!)

jdclyde
jdclyde

#5 Yes, I DO buy referbs We have been getting referb IBM's off of tigerdirect for a year now. You can't BUILD a PC for the $300 you can get a referb for, especially after you add in a copy of WinXP. Our users use a telnet session, email, and web applets, so an off-lease system works just fine. In addition, working in an industrial environment, the dust/dirt kills our systems long before they can wear out. Referbs make a lot of sense for us. And yes, my work system is one of the referbs.

jmgarvin
jmgarvin

However, you do need to be careful. Just as with a used car, you never know if the equipment was used and abused or taken care of. Hell, I picked up a "refurb" once that was full of dust bunnies and some grime on the bottom of the case....yuck...it worked well, but who knows what the previous owner was doing to it.

mjd420nova
mjd420nova

When each years budget shows shrinking support dollars, we hang onto the older stuff a little longer, making do with what we have. A tough review of the equipment types and their performance also guides us in buying used equipment that has shown to be dependable for us, saving some money and extending the lefetimes of what we already have that has proven itself. This also helps in the service department as we don't have to buy spares for new equipment types as we already have the parts on hand.

John Sheesley - TechRepublic Pro
John Sheesley - TechRepublic Pro

IT Budgets shrink. Prices go up. We still have work that needs to be done. Something has to give somewhere. One option rather than buying new equipment is to used or refurbished equipment as I mentioned in Decision Central: http://blogs.techrepublic.com.com/decisioncentral/?p=119 Have you ever purchased used or refurbished equipment for your shop or do you always buy new? If you have purchased used or refurbs, share your experiences.

irene
irene

I worked for IBM, the refurbished equipment division. You'd be surprised at how much refurbished equipment is sold. Many of the largest companies in the world utilize refurbs. It's a great way to save some money while still having quality product. I recommend either buying from the manufacturer or a very good broker that guarantees their product.

WiseITOne
WiseITOne

Think about the impact this has on the environment. Computer waste is a huge hit. I am not a flamming liberal but I think buying refurb when it is not a critical system is an excellent idea. Also let us think about the reverse. Selling our used computers. We can offer these machines up and in the end make money to reduce the cost of future systems...now that is a good idea too.

rfolden
rfolden

It may be / contain a specific piece of hardware that is no longer available 'new'. While this scenario probably doesn't happen much in the PC marked, it may in the mini/mainframe market. Example: A Dumb Terminal is no longer manufactured or available new. And also, for electronic equipment in general, sometimes newer equipment is missing a feature I'd like to have. Again, not a PC, but here's an example: I recently needed to replace a DVD recorder that went "bzzt-powie!". It had but two requirements: Record DVDs and play DIVX* movies. I had a relatively hard time finding a reasonably priced unit that had these two features. This was not the case only two years ago. So I bought a refurbished unit that was "1 model older" from the unit on the shelves today. It works great and was a steal, to boot. * .avi's encoded with DIVX CODEC.

crt
crt

I keep my networking gear a long time (my Cisco rep would confirm that) so only new gear comes in. If you buy used Cisco you have to re-license the operating system since it is non-transferrable and you will have to have the machine certified by Cisco ($$) before they put it on a maintenance contract. PCs are a different matter; a low cost refurb can make sense, it all depends what you intend to do with it. If you require MS Vista with all the bells and whistles the refurb is most likely under powered.

brent.harmon
brent.harmon

My department has an extremely tight budget when compared to the constituency we serve, and we have done an excellent job managing our budget. We do this by purchasing Off-Lease and Refurbished desktops and laptops from Dell. It is difficult to argue with a $300 computer that includes a license of XP Pro. We don't just buy any refurb, though. We always try to ensure that purchasing a refurb will save us at least $200 over the price of a new desktop/laptop, and they must include a warranty. Dell units normally come with a 3-year NBD warranty on their refurb systems, and that is sufficient for our environment. We will, however, pay for additional warranty support for our production datacenter systems. Using this model, we have not gone overbudget on hardware since I've been here and we are still able to fully support the business.

The Scummy One
The Scummy One

a refurb has had any problems resolved (supposedly), new parts added (where needed, wear areas), and run through tests again to be as good as new. It wouldnt come with 'dust bunnies'. That sounds like just a used system.

fourijm
fourijm

Latest OS and programs require that a really fast machine be used - that is, if you decide on Windows. Many Linux distributions run beautifully on older equipment - you can even run Linux from a memory stick. So you save twice - Linux for free, and you keep using older equipment.

john3347
john3347

The word "refurbished" is used to include everything from off-lease or traded-in school computers to new equipment with a critical design flaw that an unscrupulous manufacturer or distributor is trying to unload to an unsuspecting buyer. This unfortunate fact makes buying "refurbished" equipment a total crap-shoot unless the buyer knows, reliably, the true source of the equipment. Equipment that is known to be off-lease from a business usually is the safest purchase if the buyer can utilize last year's or two year old technology. (I have noticed that the asking price of this off-lease equipment has gradually been creaping ever closer to the price of new equipment in recent years making it less of a bargain while also verifying the "worth" of such a purchase). Often, an overstock of new equipment that is first grade and has never been sold to a customer is offered at substantial savings; but the buyer must be diligent in researching the source of such equipment.

ux2x
ux2x

I started buying unix refurbs for our cad system from the very beginning. My first refurb system in 1984 cost $110,000 for a workstation & term. Now that the cost of CAD systems is down under $5,000 each, I can afford new, but last year I bought five off-lease units to match what I already had. Saved about $10,000. Had to purchase two copies of XP to replace win2k o/s and one replacement for a bad memory stick. Had to upgraded memory in two others. IT put about 10 hours into setting up the five units. Did I mention that I saved about $10,000? A year later, the only failure was a power supply. Based on that, I purchased three workstations for personal use. One was damaged in shipping. The vendor gave me a new case to replace the damaged one. The scsi hard drive died early without warning. I should have realized there would be more from the shipping damage. $7,500 worth of computers for $900, and a hard drive failure. Replaced a 40GB scsi with an 250GB SATA for $75. My daughter now knows why she should backup the hard drive. Three years ago, I bought two new workstations for work and the ones I got had 64 bit winXP. IT tried to set them up, and the software we used would not run properly on 64 bit. So they went back to the vendor where I am sure they were sold as used/refurb. Someone got a good deal on those. Overall, I think my experience is good.

steven
steven

I buy used and refurbed equipment all the time. But if it comes with software, or even firmware, make sure the license permits a transfer. I heard a story years ago (during the dot-com bust) of a guy who happily showed his Cisco rep the used router he got off eBay for pennies on the dollar--only to have the rep tell him the firmware license is not transferable. Needless to say, it cost him more in the long run!

touch0ph
touch0ph

We just started recently using some refurb system boards for older PC's and buying parts for old machine with much success. Many large organizations don't want you to purchase equipment from used dealers because of the potential hassle but it may be worth your time to at least try using some used equipment, especially if demand stays relatively the same.

bus66vw
bus66vw

My organization focuses on recycling. That is a core function. Most equipment is "get it used" followed by "donated equipment" and "new but only after research shows that is the best way". All used equipment is first cycled through the inspection shop(area isolated from main offices). As much info as possible is gathered (manuals, data sheets, and repair books). It is tested (checked for power up), cleaned (inside and outside), and burned in (operated for 6 to 8 hours to check for problems). Sometimes the process of checking out the used equipment can cost more than buying new, but the organization is focused on recycling, so it is more a must do than a budget issue.

kadry76
kadry76

what if you blew your budget on a badly "refurbished" equipment? IT departments spend a lot of money on maintenance and upgrades, but they don't buy new unless needed (once you buy it you're stuck with it), secondly, and we're talking IT departments not individuals,you'll get a better deal from a supplier or manufacturer on new equipment. if one thing I've learned in this time of prices driven down..is buy new which will last longer. Though the famous adage goes like this "if it ain't broken, fix it" in IT that's not the case..especially with a consumer base demanding better services at current prices which puts the burden on you of keeping with their demands..So it is not a matter of new equipment or not. This means put a better argument for upgrades before the accounting department.

NotSoChiGuy
NotSoChiGuy

At a former employer that was not-for-profit, we bought used (off-lease) and factory refurbed equipment regularly. We usually went through a firm called C-Tech to do so. Had nothing but good experiences with them. We would purchase warranties for the systems (HP servers, workstations, laptops), but honestly, the only components to go bad that I can recall were some hard drives on the servers (which were always setup in some form of array, so no real losses were ever suffered). If I had a billion to spend on a new data center, would I go used/refurb? Almost assuredly not. However, for a budget strapped organization that doesn't require the latest and greatest, this is definitely a legitimate option.

Tony Hopkinson
Tony Hopkinson

The equipment in question was obsolete. The places where I've seen it done unsuccessfully, well nuff said. Generally what you get if you go down this route is a smaller initial investment and higher ongoing costs. No different to a used car. If you have the resources to spend a good while under the hood keeping it going, it will do. But unless you are some sort of hobbyist, the $500 vehicle is because you can't get the finance to buy something better. It's your only option, it's by no means the best one.

JamesRL
JamesRL

At a previous employer we didn't have a set plan for PC replacement, but we were forced to make some upgrades due to an impending new version of MS Office. At that point we had only bought full size PCs and we had built our own images to install the OS/apps to our own configuration. We had a group cry poor, so I talked to our vendor and explained the story. He looked into what he could do and found he had an overstock of a small form factor model but from the same manufacturer and using same components as the standard PCs. We tested them with our standard image and they worked fine. So we negotiated a price and saved $500 a PC. We bought 800 of them - you do the math. Everyone was happy, including the vendor. James

russ_gunther
russ_gunther

A refurb can be many things depending on where you get it. There is not always a "problem" that was fixed in a refurb unit. Some items are just off-lease and working fine but were upgraded. Others, from certain vendors are overstocks or incorrectly configured shipments that were returned unused. They can no longer be sold as new, so go back for testing and then get sold as a refurb. If you have the desire (or the need) to buy refurbished equipment select your vendor carefully, or you will end up with a box full of dust bunnies!

NaughtyMonkey
NaughtyMonkey

but that doesn't always work out. I have had some great refurbs and horrible ones in the past. One horrible one was a smartphone I purchased personally that after about 6 months would reboot randomly. I also just purchased a Sun refurb that has been running for about 3 months now with no issues. It did take a while to get it running though because they didn't include all of the parts requested. They had to send me parts 4 times. The money we saved was quickly used up in hours spent configuring and getting the correct parts.

TonytheTiger
TonytheTiger

One example: We bought 25 used Dell GX270s. Reason: We already had 220 of them plus a seed stock of new parts, and it saved the trouble of developing another build. We extended our service contract with Dell and added them on.

sleepin'dawg
sleepin'dawg

Thre's nothing wrong with refurbs as long as the refurbisher is competent, respected and issues a guarantee. We've bought them for word processing e-mail etc, but I'd hesitate to buy one for a cad or graphics station [b]Dawg[/b] ]:)

Nehpets
Nehpets

..... how many people read these. Then think about supply and demand economics. Then do the math. so yeah please don't buy refurb ;-)

The Scummy One
The Scummy One

the same as used. Also, it depends on how used. Here we purchase new, but smaller shops can do well with refurbs, as long as they have a good parts supply. As for critical systems, always go new with warranties in place.

jmgarvin
jmgarvin

You gotta be careful. People will label used equipment as refurb....

Komplex
Komplex

are warranties. I've had plenty of new equipment which were shipped to me with various defects, that I had to spend a few hours making sure it's their problem, an hour on customer service to get the RMA, and then to pack it up and ship it out. Going with refurbished equipment shows the Business Unit, that the IT department gives a d@mn about the budget.

JamesRL
JamesRL

A used car won't last forever, the number of moving parts are so huge, something will break, and its inevitably a long run into either great expense or the trash heap. Used computers can live along time, I've seen 13 year old computers hooked up to process machines that worked fine. The only problem would be spare for that point in time when the HD packs it in. And fixing computers is much simpler than most car fixes. James

John Sheesley - TechRepublic Pro
John Sheesley - TechRepublic Pro

I didnt even take into consideration items coming in from off of lease, overstocks, or misconfigured equipment in the definition of refurbed units. I merely thought about those items that were RMAed for warranty problems, fixed, and then sent back out on the front lines. Thanks for the clarification!

John Sheesley - TechRepublic Pro
John Sheesley - TechRepublic Pro

When I worked at the police department, the dispatchers in the radio room were still allowed to smoke on the job in the dispatch center. And did they ever. It was a like a pool hall in there some days. You could see the effects on the equipment when you opened it up. The insides of the machines were just full of grime, dust bunnies and coated with goo... Nasty stuff...

Tony Hopkinson
Tony Hopkinson

Box for box the obsolete refurbs we were buying cost more than a new equivalant. Not so much used as vintage collectors item :p They might be simpler to fix, but fixing costs money, inhouse or through an external supplier. There are gains you can make but you have to look at the availability. Just something like RAM prices for old style slots for instance. Often it's cheaper to by another refurb, pluck the memory out and chuck the rest in the spare parts bin. Use it to defer a significant change by all means, not to obviate it though.

mkowitz
mkowitz

Some refurbs are brand new and double-QC'd. For instance: someone buys a new PC and it was delivered, but when they unboxed it, they found out it was a desktop and really wanted a tower. The selling company may allow a return, and since it's been opened, it can't be sold as new. It goes through a second Quality inspection, price reduced, and sold as a refurb. It is inspected twice, and sells at maybe 15% off!

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