Belt tightening, Commoditisation and a Liquid Market are Fuelling Demand For Refurbished Hardware As Customers Look To Optimise Investment In ICT Systems
Belt Tightening, commoditisation and an increasingly liquid market are fuelling demand for the refurbished IT hardware market as more and more customers look to optimise their investment in ICT systems, according to World Data Products Ltd., the largest independent provider and global market leader for refurbished server, storage and networking hardware solutions. According to the US Bureau of Economic Analysis, only 10 per cent of a typical IT budget is available for innovations and new functions. 65 per cent is allocated to operations, management and maintenance, and the remaining 25 per cent allocated to migrations and upgrades - suggesting a real need to reduce IT operational costs in order to make funds available for true innovative initiatives.
As customers move back into positive acquisition cycles, they have more muscle and, more importantly, more purchasing insight than ever before. A more sophisticated and knowledgeable buyer means customers are more open to purchasing refurbished IT equipment from carefully selected partners. Providers of refurbished equipment offer a compelling alternative for IT Directors, favourably impacting the entire IT lifecycle.
With the secondary market for refurbished hardware now worth multiple billions of dollars globally, World Data Products believes the time is right for UK IT managers to take advantage of this new hardware supply. To captialise on this trend, World Data Products is expanding its UK operations accordingly.
“There has always been a mismatch of objectives between IT vendors and IT customers,” said Neil Vill, CEO of World Data Products. “Vendors promote homogeneous environments and short life cycles to generate sales revenues. Their goal is to maximise profits at every stage of the product lifecycle which they can even seek to shorten, for example, by product withdrawing support and maintenance Customers, on the other hand, prefer heterogeneous environments and longer life cycles in order to maximise return on investment and minimise total cost of ownership.”
Intensified competition and volatile markets have complicated the IT executive’s task to support business operations and create strategic advantage from technology investments. IT can still ‘make a difference’, but to do so, more thoughtful, even aggressive, acquisition and installed base management is now mandatory for success. Furthermore, a weak economy, combined with the aftermath of IT bloat from the dot com boom, has forced organisations to scrutinise IT spend more than ever.
“Historical overspending, IT commoditisation, changing industry dynamics, and a liquid market have matured the IT industry mature enough to support a secondary market in refurbished, top line hardware,” added Vill. “As customers move back into positive acquisition cycles, they have more muscle and, more importantly, more purchasing insight than ever before. Before IT managers simply didn’t have much of a choice. Now, however, the liquidity of the refurbished IT hardware market combined with a more sophisticated and knowledgeable buyer means customers are more open to purchasing refurbished equipment from carefully selected partners.”
More optimally managing the lifecycle of IT hardware assets lowers hardware and maintenance costs, increases upgrade flexibility, extends the useful life, and maximises the residual value of all server, storage and networking hardware. For IT managers, this results in lower costs, fewer headaches, and more control throughout the hardware lifecycle. While vendors are focused on how to maximise their profits at every stage of the lifecycle, World Data Products focuses on how to save customers money and maximise the ROI on their hardware.
“In addition to reducing direct capital costs, there are substantial indirect savings that come from replacing hardware based on its true useful life. These include elimination of migration expenses, training costs, downtime and incompatibilities in the infrastructure. Furthermore, customers are able to resell their used IT equipment to World Data Products, profiting from their used IT systems, rather than giving away or throwing away valuable assets,” said Vill. World Data Products is committed to providing operational savings through refurbished IT equipment that extends the useful lifecycle of hardware, enables consolidation and standardisation for operational efficiency, and allows IT managers to make procurements based on hardware lifecycles that are more in line with the time frames and requirements for their business.
“We already have more than 4,000 customers worldwide and sell to large, blue chip customers as well as smaller organisations looking to maximise their IT return on investment,” added Vill. “We think the time is right for buyers in the UK to do the same and take advantage of reliable, refurbished equipment rather than paying full price for new IT equipment – especially for mainstream applications.”
About World Data Products
Founded in 1987, World Data Products is the largest independent provider and global market leader for refurbished server, storage and networking hardware solutions. With annual revenues of approximately $70 million, World Data Products serves more than 4,000 customers worldwide, processes more than 4,000 transactions per month and holds a multi-million dollar inventory. World Data Products helps enterprises and governments increase the yield and useful life of their IT investment and improve IT asset manageability. This is achieved in three key ways: first, by providing fully refurbished and tested hardware solutions; second, by facilitating the economical acquisition of system components and parts,
upgrades and replacements; and third, by purchasing excess hardware, thereby maximising residual returns for customers. World Data Products’ global customer base includes large, blue chip organisations, as well as smaller companies looking to maximise their IT return on investment. The company has customers in finance, healthcare, insurance, media, transport, distribution, consumer products and government. www.wdpi.com
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