Cisco Networking Price Increases: What They Mean to You and Your Budget

 

Over the past year, Cisco has raised prices on a number of networking devices throughout its portfolio.

While not every device has been affected, most product categories have seen increases, including switches, routers, wireless components, transceivers, and even the Nexus line.

These increases are forcing many organizations to take action – finding a way to stretch your budget has become a challenge.

Gartner recently published a paper, Recent Cisco Networking Price Increases Demand Deeper Discounts, that addresses the recent increases and we believe provides insight on actions you can take.

We at CXtec have some suggestions on how you can combat rising Cisco prices, as well.

Consider the secondary market

As OEM prices, whether Cisco’s or another’s, begin to become exorbitant and restrictive to your goals, it’s important to realize you have options. Everyone knows about the secondary market, but some don’t realize how viable the solutions you receive from it really are.

Not only can you service your infrastructure with secondary market hardware, you can also achieve the same levels of success and reliability you’ve come to expect from new.

According to Gartner

“Gain leverage by seriously evaluating and considering alternate suppliers, including the used and refurbished equipment market.”

- Gartner, Recent Cisco Networking Price Increases Demand Deeper Discounts, May 2018, [ID G00355033]

If you’ve never worked with a secondary market hardware provider, sometimes all it takes is a leap of faith. Give a reputable, qualified vendor a try and validate the quality of their offerings.

 

How to choose a partner

Once you decide it’s time to give the secondary market a try, the next step is to find a suitable business partner. But how can you tell a reputable, capable secondary market provider from the multitude of small, fly-by-night vendors out there? At a glance it’s not all that simple.

Anyone can set up a slick-looking website and represent themselves as a major player with all sorts of capabilities. But there are several major characteristics that you should use to thoroughly vet them.

  • Solutions at scale – Can they handle both large and small projects in any location worldwide?
  • Value recovery – Do they have the necessary capabilities, expertise, and distribution channels to maximize the value of the hardware you already have?
  • Comprehensive inventory – How much square footage do they have dedicated to maintaining inventory? If they don’t have products on-hand, how can you rely on their warranty or their ability to provide support?
  • Product diversity – Do they have a wide variety of options for you to choose from, or are they too narrow to be of any real use?
  • Service delivery – Can they deliver on their promises and can they provide insights, knowledge, and know-how to help you accomplish goals?
  • Longevity in business – If they haven’t been around a significant time, it’s fair to say you may not be able to count on them to support your investment in the long-term.

As you consider offerings apart from the OEM, the most important factors to look for in a partner are size, scale, and breadth. These provide some insurance that you’re choosing a reliable vendor to do business with.

According to Gartner

“For prospective customers to better understand the capabilities of the used-hardware resellers, an on-site visit to the provider’s depot is recommended. Such a visit should include a review of the provider’s testing labs to help gauge inventory size and standardized processes for logistics.”

- Gartner, Used-Hardware Resellers Offer Hardware and Support Cost Savings, February 2015, Foundational October 2016 [ID G00270507]

The value of third-party maintenance

As you validate secondary market providers, you realize that you can use them to maximize value in a number of ways in your technology investments. One key strategy is to take a critical look at your hardware support.

Many secondary market providers also offer third-party maintenance (TPM) plans. TPM is a hardware support solution provided by vendors independent of the OEM.

According to Gartner

“Price increases appear to have been largely focused on hardware and software components; however, we have observed increases in some associated maintenance service costs.”

- Gartner, Recent Cisco Networking Price Increases Demand Deeper Discounts, May 2018, [ID G00355033]

Using TPM as part of a hybrid support strategy – which features a mix of OEM offerings, TPM, and even sparing where each makes the most sense – is a smart way to get the most value from your support investment. And it’s another creative means to stretch your budget money in the face of rising Cisco prices.

Any time an OEM raises prices on its hardware, software, or support, you still have options to procure equipment and services that meet your needs as well as your expectations for quality.

 

Use due diligence

The most important thing to remember is that you always have options. Don’t allow the OEM to dictate your technology strategy.

Every OEM has an agenda that revolves around encouraging upgrades to their newest offerings. Which is fine; we all want to see OEMs driving innovation and moving forward. But you shouldn’t feel obligated to upgrade until your business needs dictate it.

Quality secondary market providers can help you maintain your investment and save budget money in the face of rising OEM prices.

According to Gartner

“Despite concerns related to OEMs’ objections to the acquisition of used hardware, the used hardware resale market is an established and growing market.”

- Gartner, Used-Hardware Resellers Offer Hardware and Support Cost Savings, February 2015, Foundational October 2016 [ID G00270507]

Finding a reputable secondary market provider helps you add a partner who has your agenda, and your unique business needs, in mind. You get alternative solutions and a fresh outlook on how to invest in your technology.

Consider strategies around pre-owned hardware and third-party maintenance to extend your budget and offset rising Cisco prices. It’s the convenient, reliable way to make every dollar of your technology investment count.

Learn more about maximizing value in your technology investment with our free guide, Recovering Value Throughout the IT Life Cycle.


 

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

This article was originally published on Network World.