The Network Hub

Dec 16 2010   12:05PM GMT

Used network hardware vendor sees green shoots in 2011

Shamus McGillicuddy Shamus McGillicuddy Profile: Shamus McGillicuddy

Network Hardware Resale (NHR), the leading reseller of used Cisco gear, says that companies are unfreezing their budgets and investing in new networks. The firm thinks that this is an early indicator of accelerated economic growth.

Chris Stone, NHR’s brokerage and acquisitions manager, told me he’s seen some interesting trends in recent quarters.

  • Enterprises are selling NHR tons of Catalyst chassis switches, particularly the 6509-E. For NHR, this means they can sell the 6509-Es and other boxes for very cheap. For the larger market, this tells him that many companies are upgrading their data center core and aggregation switches — whether it be the Nexus 7000 series from Cisco or something from Juniper, HP Networking, or one of the smaller vendors. Those used Catalyst switches could help you build out your campus LAN on the cheap.
  • 10 Gigabit Ethernet (GbE) upgrades are on the rise. Stone said sales of used 10 GbE line cards, particularly Cisco’s WS-X6704-10GE for the Catalyst 6500 line, grew by 82% in 2010. The WS-X6704 is Cisco’s lower density Catalyst 10 GbE line card, with 4 ports. Cisco now offers a couple of 8-port cards that double the port density of the 6500 series.
  • Enterprises are gearing up for more spending in 2011. Stone said the fourth quarter is traditionally the busiest time of year for his firm as enterprises look to maximize the remainder of their budgets by selling used equipment and/or buying used equipment. He said 4Q10 is no exception, but based on what he’s hearing from customers this busy period of sales will continue into the new year. Enterprises are poised to continue unloading a lot of used equipment as they refresh their networks early next year. Stone said he saw a similar flood of used gear coming into NHR about a decade ago as the economy emerged from the recession brought on by the dot-com bubble burst. He said ths is a sign that enterprises are spending on infrastructure again.

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