While global spending on IT is expected to reach $3.7 trillion this year, an increase of 4.5% from 2017, according to analyst Gartner, the pressure on businesses to keep up with the latest technology and gadgets is considerable. Buying new gear has its advantages of course, but it’s not always necessary, and should never be the default option.
There are several use cases where purchasing refurbished servers, storage, and the components can work better. Cost savings can be substantial (even if your using equipment finance), especially given rapid depreciation of hardware, and there doesn’t always have to be a trade-off regarding performance and support. There are a few myths associated with refurbished IT equipment, so here are five reasons to think again about buying new.
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It’s a misconception that refurbished IT equipment means it is less reliable. However, it’s worth noting that not all refurbished products are equal. Thankfully, there are numerous reputable vendors that grade and communicate transparently. If material from such a vendor is grade A after proper testing, for all intents and purposes it can be treated as a new product with the reliability to match.
When it was released as the newest generation of Dell servers, the PowerEdge R720 cost roughly $10,000 or more depending on the requested specs. Today, you can pick one up refurbished for closer to $1000. While you may have no interest in running six-year-old equipment, the differential demonstrates the potential savings of buying refurbished. Hardware can depreciate quickly, but that doesn’t always mean it is out of date. Even buying just a lightly used next-gen server from somewhere like IT Creations can cut the upfront cost by 20-30%, with older servers providing even more significant savings.
Smaller enterprises can save significantly by purchasing barebones servers and loading them up with secondhand components. They can also buy directly from server commerce platforms like ServerMonkey, Newegg, eBay, or IT Creations. There are “official” refurbished distributors like xByte, but the savings are marginal at best.
While purchasing refurbished servers and storage systems through eCommerce may not be viable for larger enterprises, there are several ITAD companies that work to decommission and then resell refurbished equipment in wholesale. These companies stock different quantities of server generations at any given time, as the secondary market supplies shift. If the capital savings are a priority for your organisation, it may be worth negotiating a deal with a bulk IT wholesaler.
Buying refurbished equipment does not mean that you get skimped on support. Third party maintenance (TPM) has been found to have great value by industry giants such as Gartner, and it’s significantly cheaper than mainstream support from hardware vendors. Most TPMs claim 50-80% reduced costs on their plans.
In addition to cost savings, TPM companies can support hardware from several vendors concurrently. With a single point of contact for all of your support, you eliminate the need for multiple service providers if you choose to use hardware from multiple vendors.
In some instances, support for mainstream, new products are worse than third-party maintenance for secondhand or out of warranty equipment.
SpecPower has several CPU benchmarks. Looking at two reports from the last year, the differential between E7 CPU generation of servers with a PowerEdge R930, to the scalable generation CPU generation with an R940 was a roughly 41% base potential increase according to tests on two comparable configurations. The most recent generation provided more of a boost than the last shift from the E5 generation to the E7 generation.
When evaluating the pros and cons of secondhand IT procurement, it’s important to consider the hardware in the context of a larger IT hardware market. While new generations of hardware bring varying, and sometimes powerful computing boosts, how much computing power do you really need for your workloads? Can you offload some of the taxing, yet infrequent workloads to the cloud? Can you segregate them to avoid buying next-gen hardware for last-gen needs?
Data centres present an interesting dilemma for the environment. It’s been predicted that data centres will consume 20% of the world’s power by 2025. In light of this, a natural assertion might be that we need to improve the energy efficiency of our servers as fast as possible, presumably through upgrades to the latest and most efficient tech.
So how much more efficient does equipment become with each new generation? One of the widely used industry metrics for energy efficiency is Spec.org ‘s Specpower_ssj2008 benchmark, which determines overall ssj_. It’s used to compare and contrast power efficiency in the context of a server’s performance. Essentially, the higher the number, the more efficient a server is across a range of workloads.
From one set of submitted Spec results, the 12th generation R720 to the 13th generation of Dell servers saw a roughly 96% increase in the ssj_ops/watt, going from ~5500 to an averaged ~10810. Though not necessarily conclusive numbers across this smaller sample, a nearly doubled power efficiency over the previous generation is certainly too substantial to ignore.
Each generation of technology does not necessarily provide the same level of improvement. For example, the next generation jump from the R730 to the R740 only offered a roughly 9% increase in SSJ_Ops/Watt, going from ~10810 to ~11790.
It’s about weighing up initial costs with overall efficiency. The outlay may undermine the value of any efficiency savings. Not all generational jumps provide massive increases, while other new generations offer marginal at best gains. Therefore, the capital savings are significantly more appealing than the miniscule efficiency boosts in energy and performance.
Playing the game
In summary, refurbished IT equipment can add considerable value to a business if it is used to handle certain tasks. While it should never compete regarding performance and efficiency (if it does there is a problem with that vendor), it can more than handle most current tasks cost-effectively. It’s about using the estate intelligently and not throwing good money at shiny new servers just because it’s the latest tech. You may not need it, not yet anyway.
Getting the most out of the refurbished market is also about timing. It’s worth keeping an ear open for new product releases, as this will immediately push the latest models down the cost scale. It’s like buying a used car that drops in value, the day after the most recent models hit the shops. It may not have all the latest gadgets and gizmos, but it’s certainly more cost-effective in getting you from A to B.
In short, secondhand equipment can entirely be reliable, and the savings gained on upfront cost and support is too great to make buying new hardware the default option. Secondhand equipment should always be part of the mix.
This article was written by Jeremy Schaller is a data centre industry analyst and heads PR & marketing for Exit Technologies; an R2 certified, global IT asset disposition company (ITAD), that covers the data centre, education, finance, government and healthcare industries. Jeremy tweets at @ExitTech.