Used IT gear: Good stuff cheap -- just not always

Computerworld - When Cox Ohio Publishing needed to buy 600 laptops, it decided to buy used gear -- and saved approximately 70% of the cost of going with new units.

Brand-new laptops would have cost around $600,000, explains Catherine Bates, asset and configuration manager at Cox Enterprises, the parent company of Cox Ohio in Dayton. But Cox saved approximately $420,000 by going the used-gear route with Redemtech Inc. in Columbus, Ohio.

Cox is rolling out the laptops in the early stage of what's planned to be a yearlong implementation. The Dell machines are less than two years old, and so far everything is working well, Bates says.

"One of the benefits Redemtech offers is the diagnostic and grading process that they put their equipment through," she says. "We knew we were getting grade 'A' machines, which means that there are no hardware defects or cosmetic issues with the equipment. The equipment functions just as if we had purchased it new." The laptops included a warranty that covered Cox for 90 days, she says.

This is on par with what some new laptops come with, though there are exceptions. New Dell Vostro laptops, for instance, come with limited warranties of up to a year, but other Dell hardware warranties vary between 90 days and four years. For its part, Hewlett-Packard Co.'s Mini 1000 XP laptop comes with a one-year warranty.

Cox Ohio is by no means alone in considering used-tech equipment instead of new, and a number of companies are taking the lead in servicing this growth market. Hewlett-Packard's Renew division and companies like Redemtech, Canvas Systems and Frontier Computer Corp. typically buy used equipment from user organizations that are refreshing their systems. Then the vendors perform diagnostic and grading on the gear, and offer it to buyers at a deep discount off what it would cost new. Sometimes these vendors get their hands on IT equipment that was returned and/or never even used by customers who mis-ordered or decided to go another route, for instance.

Forrester Research Inc. analyst Doug Washburn says that IT buyers should consider the different flavors of used equipment, since performance and cost will likely vary. Remanufactured, refurbished or reconditioned are all terms that "refer to a device that goes through a stringent visual and technical refurbishment process," he says, versus just "used" -- which does not guarantee these processes.

Washburn explains that in this economy, when capital expenditure dollars are challenging to come by, organizations are looking to preserve funds wherever they can. Plus, this option does double-duty as "green" IT, which is increasingly part of the agenda at many companies, he says.