A hardware purchase is one of the most critical investments an IT company can make. Therefore, it’s crucial for money to be invested wisely in hardware equipment that will offer the best possible performance for many years to come.
That said, you can save money when you buy older equipment, but buyers should know the difference between used and refurbished items — and how those are distinguished from other sales categories like new, factory sealed and remanufactured — before making a purchase.
Different Categories of Hardware Purchases
Let’s take a look at the different categories to consider when purchasing hardware:
When a product is refurbished, it undergoes the same basic process as a remanufactured item. The difference here is that the refurbishing is done by a third party rather than the original manufacturer. As such, a given product will likely undergo an audit, cleaning and testing. Any features that might have changed since the time the product was first produced are also updated. The updates to a given product will generally cover the following areas:
- Operating systems. Upgrades are made to most operating systems on an annual basis, if not more frequently. Therefore, a product that’s being refurbished only nine months after its initial purchase could still need an OS upgrade. Thankfully, the party responsible for refurbishing the item will spare the next purchaser of the added costs associated with system upgrades.
- Microcode. The operational instructions programmed into a given piece of IT equipment are checked and upgraded, if necessary, to ensure the ongoing operability of the product.
- Firmware. For a piece of equipment with read-only memory, the program software might possibly change between an original production run and a refurbishment. To ensure ongoing system compatibility, firmware is checked and upgraded as needed.
- Drivers. The drivers needed for a given set of ports, motherboard cards or peripherals can change in the months that transpire between the initial production of a particular component and the refurbishment process, which, therefore, accommodates such changes.
- Patches. Software codes are changed constantly as upgrades improve the performance and boost the security of a given program. On refurbished products, patches are upgraded to fix bugs and spare future customers the trouble of avoidable problems.
The difference between used and refurbished hardware is that refurbished is much safer to purchase, since all the features will have been tested for functionality, and any applicable software will have been updated accordingly. As such, the benefits of refurbished equipment far outweigh the savings that come with buying used equipment, since used items have not been tested, cleaned or upgraded.
To frame the “used vs. refurbished IT hardware” question another way, a used item can be a risky purchase, whereas a refurbished item will generally be as good as new.
A used piece of IT hardware would be a previously owned product that has simply been placed back on the market with basic functionality testing, but no upgrades. Therefore, the product could be anywhere from several months to several years old, but limited to the original microcode and firmware. Moreover, the product will probably not have been cleaned internally or given any expert maintenance. As such, the equipment could be outdated or of limited usefulness. In worst-case scenarios, a used item could fail after mere weeks or even days of use.
A used product can be sold from any outlet, authorized or not. In most cases, however, used IT hardware is found in secondhand shops. Consequently, sales of such items have no connection to the original manufacturers. That said, a lot of people prefer to buy used hardware for the following reasons:
- Low cost. Used equipment will often sell for pennies on the dollar of a new equivalent. If an item is at least five years old, it’s probably no longer in production and is of low market value, especially if most users have abandoned such equipment. Even if an item was stocked in department stores as recently as 18 months ago, it could sell used at some drastically reduced price if the technology has changed since the time of its release.
- Rarity. With certain systems, there might be a need for just one select component, which could very well be a simpler, back-dated peripheral that’s no longer in production. Since such items are often hard to find, scouring the used racks is often the best bet.
- Simplicity. Not everyone is looking to replace or upgrade a whole entire system of servers and routers. When it comes to buying simpler, low-maintenance components that never change and are rarely ever upgraded, there’s often little to lose with buying things used.
Despite these pluses, the benefits of refurbished hardware generally outweigh those of used items. While used hardware can be inexpensive and sometimes unique, refurbished IT hardware is generally more attuned to the current demands of the business sector. That’s said, the difference between used and refurbished hardware could really just be a matter of your own personal needs.
A new piece of IT hardware would be any product sold for the first time directly from the manufacturer. For instance, if you purchase a sealed computer item from one of the big-name electronics stores, you’ll have a new product in your hands. Basically, for a product to be considered new, it must meet the following descriptions:
- Never previously owned
- Fresh off the production line
- Sold from a channel authorized by the original manufacturer
An authorized channel could be the company that manufactures the product or any outlet that orders wholesale directly from the manufacturer. In the latter case, the outlet and the manufacturer split the profits on each new product sold.
4. Factory Sealed
When a never-opened product is sold through an unauthorized channel, the product is generally referred to as either “factory sealed” or simply “unused.” For example, when the remaining stock of a discontinued piece of equipment is pulled from the shelves of a major department store, the unsold items will often be transferred to smaller outlets and sold at discounts. Factory sealed items are sometimes sold with a maintenance contract in lieu of a warranty.
The outlets that sell unused products could range from discount departments and locally-owned mom and pop stores, to small-time vendors on the Internet. While factory sealed products are generally reliable and defect-free, it’s important to check whether an item sold under this category will have the following qualities in relation to an IT system:
- Up to date. An unused, unopened product that was manufactured last year might be lacking the latest system updates. This can be especially problematic if the product was made without foresight for such developments and lacks the capacity for updates.
- Optimal operation. While you can save money by purchasing factory sealed products, it doesn’t mean you’ll have an easier time making use of such equipment. If the manufacturer has developed newer makes and models, the improved features could be worth the extra amount you’re liable to pay when you buy new items fresh off the shelves.
- Sufficiency. Typically, a factory sealed item will be a product that was discontinued by the manufacturer. While makers of computer products constantly innovate, certain discontinued products beg the question: Did the company stop making the item because newer models made it redundant, or was the product insufficient to a majority of users?
- Compatibility. Even though a recently discontinued item might function perfectly well, there’s a possibility it could fail to integrate with other components in your system. Compatibility issues should be of particular concern with products that have wound up being technological cul-de-sacs in the line of innovation from a particular manufacturer.
Basically, you save best on factory sealed products only when an unused item is technologically current and compatible with other hardware. Furthermore, any product you purchase should have the capacity for system updates well into the future.
When products are returned, they’re sometimes resold by the original manufacturer. It might be a case where a product has been returned after an initial 30- or 60-day tryout period. In other cases, a product might be traded in at the outlet where it was purchased for a newer piece of equipment. Either way, the product can likely be resold, but it will still need to be run through some tests before being placed back on the shelves.
In cases like these, the product will often be remanufactured. The process of remanufacturing an item is handled by the original manufacturer, who tests and audits the piece of equipment to ensure it’s still basically as good as new. Therefore, the manufacturer takes full accountability for the quality of the resold item because no third party is involved in the refurbishing process. The process generally consists of the following steps:
- Auditing. This step is best performed by the company that makes the product, since the original manufacturer would have records of all activities attached to the serial number of a given item, including the initial release date and sales history.
- Testing. Before a product is remanufactured, it’s likely to be in good condition anyway. That said, it’s still important to run some tests on the product to ensure no damages were incurred during the changing of hands. The tests performed on a given product will include a checkup of the basic functions — activation switches, connecting ports — and possibly some of the internal mechanisms.
- Updating. Even though a product might only be six months to a year old at the time of remanufacturing, the company behind the product will have possibly made upgrades to their entire line within that time. After all, a few months is a long time in the world of technology. A remanufactured hardware product will be inspected for needed upgrades and given any that might apply.
Generally speaking, remanufactured products are as good as new, though they’ll often sell at reduced rates from the original listing price. For some of the most expensive IT equipment on the market, remanufactured products are some of the best deals you can find.
6. As Is
A piece of hardware sold “as is” would be a product that has simply been placed in the aisle of a used outlet with no maintenance or upgrades whatsoever. Consequently, the product could be of any age or condition, from new and optimal to old and broken. In all likelihood, a product sold “as is” will have changed hands multiple times. While a customer will occasionally luck out with such purchases, most products in this category are less than satisfactory for any high-grade IT system.
Since such items will have not been cleaned or even given basic tests for functionality, it’s risky to spend significant sums of money on anything sold “as is.” As a rule of thumb, the following types of “as is” items should be avoided at all costs:
- Anything with chips. Any piece of IT equipment that contains complex internal mechanisms is best bought new or refurbished. When such an item has changed hands at least once and is now being sold “as is,” you should question why the product wasn’t deemed worthy of refurbishment. Even if it seems to activate properly when plugged in and powered on, the device could possibly fail shortly after and not be worth the price in repairs.
- Anything with internal circuitry. The internal wiring of a complex piece of machinery can be complicated. As such, you should only buy such products by a seller who knows how to care for them, and not at some used outlet that dumps everything onto shelves to be sold “as is.”
- Anything with a display screen. Unless you have a chance to test before you buy, any piece of hardware that contains a monitor is a risky purchase when sold “as is.” Whether it’s a big-screen monitor, a tablet or some smaller device with a display screen, it’s liable to have functional issues — poor focus, no color, horizontal lines — if sold with such little care.
In all honesty, the only pieces of a computer system that are safe to purchase “as is” are mouses, keyboards, thumb drives and USB cords. Even if one of those items ends up performing poorly, you won’t have likely wasted too much money finding out.
Used vs. Refurbished Hardware
Knowing the characteristics that define used vs refurbished IT hardware, the question now turns to determining which of the two options is better from a buyer’s perspective. When you compare the benefits of refurbished equipment and how they contrast with the risks of buying used, the answer becomes obvious.
Refurbished Hardware Items
As opposed to a used item that’s simply sold as is, a refurbished item will actually be cleaned and given a technological overhaul. The benefits of refurbished hardware include optimal performance and long lifespan from a product that could sell for at least two-thirds of the original retail price. When you compare prices between IT hardware products in different sales categories, keep in mind the following refurbished hardware benefits:
- Cleaned. The first step to refurbishing a piece of hardware equipment is to clean any dust from the outside and inside. This can be very crucial for the continued functionality of a given piece of hardware, which might otherwise overheat due to buildup on the internal parts.
- Updated. Before an old piece of hardware is placed back on the market, it needs to be updated for today’s systems. Technology changes constantly, and a refurbished hardware unit must be up-to-speed on these changes to remain of value to programmers.
- Tested. Just as new products are tested before their commercial release, old products need to be retested to ensure their continued viability. Otherwise, there’s no way of knowing whether a particular server or router will be able to perform the necessary tasks for a given operation.
- Reconfigured. If an old piece of hardware is to be resold, it might need to be physically overhauled in some shape or form. Whether it’s the internal wiring or the enclosure, there’s likely a good reason why certain older models look and feel outdated and need to be reconfigured.
When you buy a refurbished router, you won’t have to worry about activation issues or problems with any of the jacks, because the router will have been tested in advance of the sale. You wouldn’t get this type of assurance with a used product, because the testing would be minimal at best and nonexistent at worst.
Therefore, the best way to keep the “used vs refurbished IT hardware” comparison in perspective is to view the two options in relation to quality and savings. With used products, you get untested and possibly outdated IT components sold cheaply. The refurbished option, by contrast, gives you savings on a product that can offer you optimal performance for years to come.
Used Hardware Items
People are often confused by sales categories such as “used” and “refurbished” because they assume the terms are interchangeable. This is only half true, since all refurbished items are indeed used, but not all used items have been refurbished. Consequently, used items are riskier to purchase because they haven’t undergone the process of refurbishment, and could have the following defects:
- Outdated. Since used items receive little, if any, maintenance before being resold, it’s often hard to tell whether such items are still useful in today’s IT systems. Has technology changed since the item was manufactured? In some cases, the out-datedness of a certain item might render it incompatible with other components in your setup.
- Unchecked. Refurbished hardware benefits trump used items in this regard, because a person just isn’t making a safe purchase when an item hasn’t been tested beforehand. Simply put, all the features of an IT system component should be tested before the item is resold. Otherwise, any given number of things could be wrong with the item.
- Incompatibility. Without any refurbishments, a piece of hardware can become relatively obsolete with the space of a few years. Consequently, a component you purchase used to save money could end up being useless due to an incompatibility with other IT equipment.
- Broken. When used products are sold “as is,” product damage often comes with the territory. Even if you don’t see anything wrong with a piece of hardware from the outside, internal damage might already exist within the circuitry.
With any purchase, savings means little without quality assurance. For that reason and many more, the benefits of refurbished equipment surpass any of the perks that are sometimes discussed with regard to used products. While it’s true that used products are inexpensive, you often end up paying more money with used equipment due to the frequent repairs and replacement costs — money that could ultimately be saved with products that are marked down, yet good as new.
Buy IT Hardware From MDSi, Inc.
In IT departments, it’s crucial to have up-to-date system components at all times. At MDSi we provide servers, routers, switches and security appliances for IT hardware systems. To learn more about our products, visit the hardware section of our site.