SOURCE: UNEDA

UNEDA

April 21, 2009 08:00 ET

UNEDA Announces Results of Second Membership Survey Highlighting Strong Growth in Market for Pre-Owned Networking Gear

Aggressive Business Growth Driven by Increased Supply of & Demand for Quality, Pre-Owned Equipment, Immediate Product Availability, Savings Over OEM Prices and Customer Responsiveness

SAN DIEGO, CA--(Marketwire - April 21, 2009) - United Network Equipment Dealer Association

News Facts

--  United Network Equipment Dealer Association (UNEDA), an alliance of
    more than 300 of the top pre-owned network equipment dealers worldwide, has
    released its annual survey results, revealing continued growth in this
    market as companies of all sizes seek more affordable equipment procurement
    and maintenance alternatives. Nearly two-thirds of UNEDA members responding
    to the survey reported an uptick in their business in 2008 while 76 percent
    revealed they expected an increase in business in 2009, despite an overall
    downturn in IT spending.
--  More than half of those polled cited an increased supply of, and
    demand for, pre-owned network equipment as the top trends driving business
    expansion over the past year. An increased need for alternative maintenance
    and a growing demand for spares due to delayed product upgrades and network
    migrations rounded out the top-four factors driving continued market
    growth.
--  More than 40 percent of the respondents reported an increase in
    business from larger enterprises over the past year, including financial
    services companies and first-time equipment buyers/sellers.
--  According to the survey, the No. 1 reason companies buy from UNEDA
    members is responsiveness, followed by product availability, rapid delivery
    and savings over OEM pricing, which is up to 90 percent off list prices.
--  Together, UNEDA members sell more than $2 billion in pre-owned gear
    annually with the membership retaining up to $1 billion in accessible
    inventory ready for overnight delivery.
    

2009 Secondary Market Trends

--  More than 42 percent of the members surveyed cited a high percentage
    of repeat business, with customers buying gear and/or accessories more than
    20 times throughout the year.
--  The vertical markets with the most activity in the secondary market
    last year are the following in ranked order: telecommunications,
    banking/financial services, high tech, municipalities/government and
    education.
--  Network expansions topped the list of primary uses for pre-owned
    network gear, followed by production network, network sparing, testing and
    disaster recovery implementations.
--  Of those polled, 98 percent offer overnight delivery of equipment
    while more than 90 percent ship worldwide. In addition to expedited
    procurement and delivery, 67 percent of UNEDA members surveyed provide
    asset recovery services, 58 percent have trade-in programs, 56 percent
    offer pre- and post-sales technical support while 46 percent include 90-day
    warranties on all gear sold.
--  More than 97 percent of those surveyed buy and sell network routers
    and switches from Cisco, with Juniper in second place, followed by Nortel,
    Extreme, Foundry and Avaya. The most popular Cisco equipment bought and
    sold on the secondary market includes the 2800 Series Routers, Catalyst
    6500 Series Switches, Catalyst 3750 Series Switches and 7200 Series
    Routers.
    

UNEDA Members Rank Top Priorities

--  More than 86 percent of UNEDA members polled plan to add staff in 2009
    in keeping up with projected business expansion.
--  While 93 percent of those surveyed cited the ability to operate in a
    secure, safe trading environment as the major impetus for joining UNEDA, 61
    percent named the ability to adopt business best practices as their main
    reason for becoming a member.
--  Over the past year, 60 percent of the members surveyed reported a
    decrease in the amount of counterfeit equipment they've identified and
    intercepted despite the fact the members still think identifying
    counterfeit gear is one of the top three toughest issues they face as a
    secondary market provider.
--  Fighting OEM fear, uncertainty and doubt (FUD) while also addressing
    Cisco SMARTnet issues were ranked as the top two toughest challenges facing
    providers of secondary gear. Of those polled, other top-of-mind issues
    included ensuring product integrity and quality; keeping up with demand for
    popular, previous-gen gear and dealing with exorbitant OEM fees for
    inspecting and re-registering maintenance of secondary equipment.
--  In identifying top priorities for the association, nearly 60 percent
    of those polled cited the need to increase public awareness about the
    secondary market to combat negative OEM propaganda. Others hoped UNEDA
    could seek a cooperative working relationship with Cisco while others want
    clearer explanations about the legality issues surrounding software
    licensing. Rounding out the top five is the idea to create a UNEDA "Good
    Housekeeping" seal of approval for all equipment bought and sold through
    the alternate channel as well as the creation of an independent counterfeit
    task force.
    

Supporting Quotes

-- Mike Sheldon, president of the board of UNEDA; president and CEO of
   Network Hardware Resale:
   "This landmark survey offers an important snapshot of a thriving market
   segment that is continuing to grow despite the downturn in the economy.
   Now more than ever, companies are turning to the secondary market and
   UNEDA member companies to stretch their IT dollars farther. The high
   percentage of repeat business underscores the fact that UNEDA members
   have become trusted, alternate sources for the most economical,
   top-quality networking equipment."
-- John Stafford, vice president of the board of UNEDA; COO at Network
   Liquidators:
   "Our membership, which comprises large, global leaders as well as
   emerging entrepreneurial companies, all share a commitment to making the
   secondary market a safe and reliable avenue for pre-owned networking
   equipment. We work together to establish and uphold strict industry best
   practices, which gives our customers complete peace of mind when they
   buy from, or sell to, UNEDA members."
-- Corey Donovan, UNEDA member, vice president of operations of Vibrant
   Technologies:
   "The results of the UNEDA membership survey indicate a bright spot in an
   otherwise down economy as well as an awaiting marketplace solution for
   budget-challenged network managers and cost-conscious CIOs. Concerns
   about counterfeit equipment, mostly throttled by OEM FUD, are clearly
   drowned out by UNEDA members' focus on highly ethical business
   practices, which has led to $2 billion in combined annual sales."

Resources

-- In 2008, the used network equipment market was sized at approximately
   $2.5 billion in size, equivalent to six to seven percent of the
   networking equipment OEM market (excluding wireless infrastructure).
   Larger enterprises than ever before are buying used equipment; in
   particular, orders from large banks and insurance companies have
   increased. Source: Bernstein Research compiled by Sanford C. Bernstein
   & Co. LLC
-- UNEDA Frequently Asked Questions
   http://www.uneda.com/faq.html
-- Representative UNEDA member companies
      - Network Hardware Resale
        http://www.networkhardware.com/
      - Network Liquidators
        http://www.networkliquidators.com/
      - Vibrant Technologies
        http://www.vibrant.com/

About UNEDA

The United Network Equipment Dealer Association (UNEDA) is a worldwide alliance of more than 300 of the leading marketers of pre-owned networking equipment. Members represent the entire spectrum of the secondary market, from companies with hundreds of employees and millions of dollars in inventory to small, entrepreneurial organizations. Together UNEDA members sell more than $2 billion in pre-owned gear annually to over 10,000 customers. UNEDA members must adhere to a strict code of ethics that includes a firm policy against selling any equipment that is not legitimate. For more information, visit www.uneda.com.

Contact Information

  • CONTACT INFORMATION:
    Sue Hetzel
    HetzelMeade Communications
    Email: Email Contact
    760-434-9927