Second user systems are environmentally friendly, cost-effective and make sound business sense. So rather than pay a premium for the latest technology, businesses should be looking to maximise their IT budgets by deploying fully supported and maintained pre-owned equipment, argues Daren Bland, managing director of Powercore International.

EU/WEEE regulations

Major companies, including global blue-chip players, are now opting for second user systems to support their mission critical and day-to-day IT operations. Pre-owned IT equipment provides companies with proven technology which is often more reliable. It is also much cheaper to purchase, which means shrewd directors are able to make their IT budgets stretch further.

Not only are these refurbished systems economically viable, they also make sound environmental sense. With recent EU legislation promoting the safe disposal of electronic equipment, extending the lifecycle of systems is a positive step forward.

The increasing need for compliance with UK law and EU/WEEE regulations on the throwing away of old computers, monitors and IT equipment means that organisations are now required to adopt environmentally friendly options for the clearance and disposal of redundant computers.

The WEEE directive specifically encourages the re-use of equipment because it reduces the amount of resources consumed. A study by a leading waste management consultancy estimates that for every ton of equipment produced, up to ten tons of resources have been consumed.

Re-cycling used computer equipment by refurbishing it and offering it at lower, second-user prices also offers opportunities for affordable access to IT for business and consumers.

Is it necessary to buy new?

While some companies, supported and encouraged by the major equipment manufacturers, will always choose to purchase new IT equipment, the reality is that computer systems don't wear out, they just get superseded by faster and smaller models.

Despite the speed that modern business operates at, there are few core business applications that truly make full use of the speed and performance of the latest processing technologies.

While newer systems may be smaller and faster they come with their own issues of power and cooling. Unless space is particularly at a premium, many businesses can work effectively with reliable, cost effective, older versions of the technology.

Availability of equipment is another important factor. New systems are often built to order taking weeks or even months to arrive and this is where the second-user market comes into its own - availability is high and second user refurbished equipment takes only a few hours or days at most to reconfigure and retest before being shipped.

Second-hand demand

The market for second user equipment is growing steadily. It's not just canny minded companies who are choosing to buy pre-owned systems; disaster recovery specialists, maintenance suppliers and leasing companies all acknowledge the benefits that buying refurbished equipments brings.

With the perceived increase in terrorist activity in the world, together with unexpected weather patterns causing disruption to electrical supplies, more companies are seriously looking at their disaster recovery options and there is an increase of activity in the commissioning of disaster recovery suites and second data centres.

As costs for these environments have to be met upfront, deploying second user equipment means that systems can be generously specified and yet remain within budget.

With increasing pressure on IT systems to work continuously, most equipment, including newly purchased boxes where the warranty offered often falls short of business needs, is subject to ongoing maintenance contracts.

Third party maintainers depend on the second user market to provide a continuous supply of spare parts for older machines as well as reliable 'hot' swap-out systems in order to meet the stringent turn-around times demanded in their contracts.

There is also a growing market in leased second-user equipment especially where companies only need the machine for a short time - days or weeks - and don't want the obligation of buying and then disposing of the system.

Avoiding the grey market

Price and availability are always significant factors when making purchasing decisions and companies are often tempted to look at the grey market for new equipment to meet these conditions.

Unlike the genuine second user market, the grey market is a broad term for the unauthorised channelling of products - a subversive supply chain whose image is one of dodgy traders, counterfeiting and organised crime, offering attractive pricing, poor quality and non-existent support.

If something seems too good to be true, then unfortunately it probably is. Customers take a significant risk when they buy through unauthorised channels.

These sales are not eligible for service and unlawfully imported products do not qualify for any warranty support. Purchasers of grey market products also face the risk that these products have been reconditioned with counterfeit parts prior to sale and therefore may not perform as expected.

The grey market relies on supplying and sourcing equipment, they are not in the business of certifying provenance, supporting or maintaining the equipment.

In stark contrast, legitimate pre-owned IT equipment gives businesses an incredible amount of flexibility as they can be provided with the same type of warranties as a new system and can be covered by the exact level of on-site, fast response maintenance as all other essential IT equipment.

Going green

The second user market is not a competitor to the major manufacturers and the sale of new equipment, but another equally valid channel for distributing their hardware and serving their customers better.

For many companies it makes sound business sense and environmentally, anything that slows down the rate at which we are consuming our planet's resources is worth some consideration. Buying new is environmental suicide - go green, buy second user and get better value out of your IT budget.