Most of us are sick of seeing and hearing the word "unprecedented" because of the Covid outbreak. But it has left a deep wound in...
Most of us are sick of seeing and hearing the word "unprecedented" because of the Covid outbreak. But it has left a deep wound in the world’s current and future economic well being.
A pandemic of this scale has not happened in almost a century. But it has left scars on every industry. The officials and corporations are scrambling to analyze the long-term impact. In the short term, temporary forces will drive inflation in the United States for the next few months. But, they do not rule out the prospect of longer-term concerns.
Over the next few months, significant inflation is projected. It's because comparing low pricing to a period of expansion creates a distortion. As the economy recovers, it will be compared to a previous time when lower demand was induced.
Unemployment and under-employment has affected gasoline prices, transportation expenses, and non-essential commodities. But what about the impact of inflation on the refurbished equipment market?
IT Equipment Supply Chain Crisis
The pandemic triggered a complicated chain reaction. That impact is currently reverberating throughout the world's distribution network. Manufacturing facilities in significant production areas worldwide were shut down. The closures caused production delays and backlogs in almost every industry.
A semiconductor chip shortage hampered the supply of smart products across many categories. Except for the auto industry, the chip shortage has eased. But, it has not solved all the issues in the IT equipment market.
As companies battled to recruit qualified employees, production delays worsened. Ports, warehouses, and transportation businesses could not keep up with logistics. These variables combined highlight inefficiencies across the network of vendors.
As these shifts took place, companies still required improved products quicker than ever. To meet increased demands, companies' operations are growing more complex. Essentially, manufacturers are under pressure to innovate and use Industry 3.0 initiatives. This includes smart factories, machine learning, artificial intelligence, and robotics.
Inflation and Refurbished Networking Equipment
Purchasing used network equipment makes more sense in this inflationary environment than ever. It's because refurbished equipment is now available at a low cost. You can save thousands of dollars in equipment costs and avoid severe depreciation.
While most network equipment is designed in the United States, it is manufactured offshore. With limited supply networks, possession is crucial. The inventory is with the refurbished suppliers (used, grade A, tested, defaulted).
Total Cost of Ownership of Reconditioned Networking Equipment
Much talk is about the total cost of ownership (TCO) in the network hardware world. It is a way to look at your purchases and understand the real-life costs from acquisition to disposal.
So, why do IT people look at the total cost of ownership?
There is a difference between hardware price and long-term costs associated with that hardware.
"The total cost of ownership (TCO) is a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time." - Gartner.
For the IT department, TCO includes the following:
- Hardware and software acquisition,
- Management and support,
- End-user expenses,
- The opportunity cost of downtime, training, and other productivity losses.
At CXtec, we agree that the total cost of ownership is a way to look at your purchases. But hard and soft costs are involved, from planning and deployment to operation to decommissioning. Some products have a higher cost of ownership than others. The cost of ownership can also depend on your refurbished hardware supplier.
So what kind of costs are we talking about? Here are some examples:
- Labor / paid hours
- Updating systems due to incompatible tools
- Training/hiring staff
- Making changes based on unforeseen consequences
- Maintenance/hardware replacement services
- Opportunity cost
- Disruptions during migration
- Power costs
We consider this and offer solutions to lower the TCO. We understand your business. So, we take steps to provide products and services throughout your network hardware lifecycle.
You should think about this as soon as you begin the planning phases of a project. This means at the time of acquiring hardware. It can save your company a lot of money and make your life much easier.
Crucial Factors Influencing the Refurbished IT Market
In this inflationary market, prices rise, demand soar, and supply chains are disrupted. Some of the critical factors influencing the refurbished IT market are as follows:
1. Increased Internet Download Speeds
Internet download speeds are expected to increase from 15-100MB per second to 1 Gigabit. The current company, hospital, and government networks are designed for slower internet access. This will become a stumbling block. It is due to the increased demand for faster speeds. Internal network infrastructure upgrades will not only be required. But even so, companies will need it to remain competitive.
2. Cost-cutting Measures
Strategic decision-making, especially about expenses, is vital in any business. Companies are reducing their overhead costs to combat the effect of high inflation. Managers are adopting sustainable cost management systems to fuel a company’s strategy. This will enable the business to out-invest its competitors, at scale, on strategic costs in both good and bad times. Many companies are looking for new vendors for refurbished IT networking equipment. This is resulting in increased demand.
How Should You Plan for the Next 12-18 Months?
So, where will IT managers be if supply chain disruptions continue? We cannot emphasize enough the necessity of carefully managing money. Planning ahead of time and evaluating alternate sales channels will also be helpful.
1. Budgets Must be Adequately Managed
In this climate, pulling out a previous Annual Operating Plan budget and adding 10% will not give you a realistic overview. Your upper-end estimates should be higher. Be prepared to pay more than you have paid before. Expect to pay a premium for everything you need on an urgent basis (assuming it is available).
2. Plan Further Ahead
We urge that you consider your hardware requirements as soon as possible. Estimate your needs over the next 6-12 months. It could be phones, servers, and laptops. Then, as soon as possible, place your order. You'll still need to wait, but you'll be in the queue. Don't overlook providing plenty of room in your project timelines.
3. Create Efficiencies
Look for ways to cut operational costs. This will help you repurpose or spend those budget resources elsewhere. For example, you might sell your used IT equipment in the secondary market. Or invest in reconditioned devices (e.g., if you need extra storage).
4. Extend your Time Horizon
We understand that delaying a project is not your first choice. That option does not appeal to us either. But, you may not have a choice if you cannot buy the IT equipment you need during this supply chain crisis. Our advice is to reprioritize tasks often and to remain flexible.
5. Save on Warranty
A warranty only comes into play if you need to use it. And when that happens, a good warranty is worth its weight in gold. It's time to find a vendor that offers a genuine warranty. That warranty will cover your back and save money at a critical time. But it's also proof that your technology vendor stands behind its hardware.
So how good can that pivotal warranty be? Look for a genuine lifetime warranty. That way, you know you're covered throughout the product's lifecycle. This will also include a life-saving safety net throughout that first year. A good warranty helps you bid farewell to sudden expenditures due to unforeseen equipment outages.
Why You Can Rely on CXtec For Maximum Value and Higher ROI
Using network equipment can be beneficial when purchased from reliable vendors such as CXtec. It is a low-cost, high-reward solution to an escalating network hardware shortage. Internet connection speeds are increasing. Internet infrastructure is modernizing. Environmental problems are looming. But supply chains are being disrupted. The demand for better equipment is rising at an exponential rate. Reconditioned network equipment is a straightforward, rapid, and elegant solution.
CXtec is the perfect partner for you if you need a partner you can rely on to manage this IT equipment supply chain crisis and fulfill your business objectives. equal2new® by CXtec is a premium brand of certified pre-owned infrastructure hardware that enables brand like you to:
- Extend the life of your technology
- Leverage superior-quality, time-tested equipment at reasonable pricing
- Experience genuine warranties to back up your purchases
Quality, simplicity, and efficiency are the hallmarks of the equal2new brand. We have become the world's top recommendation for trusted and cost-effective used IT hardware. We assist our customers in maintaining their current technology infrastructure. We do it by utilizing products that are no longer manufactured. This facilitates unlocking their technology investment's total capacity and value at each stage.
We can deliver excellent quality network hardware faster than most OEMs in the market. It's because of our global service delivery capabilities. Our certified experts can recommend the best solution for your business. Unlike OEMs, we offer a lifetime warranty, no hidden fees, and shorter lead times on most products. This allows you to get the most out of your technology hardware investment.
Contact our experts to learn more about our network hardware solutions.
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