Used networking dealers have cautiously greeted Cisco's support of a new Comstor scheme as a sign its stance on refurbished kit is softening.
Comstor is aiming to punt £3m to £4m of refurbished Cisco kit in the UK this year after launching a secondary market support programme backed by the vendor.
Cisco second-user equipment is identical to new kit apart from the "RF" on the end of the part code and a typical cost saving of 20 per cent, according to the distributor.
Most of it is re-opened stock that has been returned to Cisco.
Tony Nevill, general manager of Comstor UK, told CRN: "Business is still out there, but it is harder to win and when competition is fierce, margins shrink. Resellers see remarketed as an opportunity to bolster their margins in that situation."
Cisco's attitude to second-user kit is changing, Nevill added, as it sees it as a way to eradicate grey market trading, improve its environmental credentials and clear stock.
"Historically we have done a degree of remarketed business but this year we have put focused resource behind it and expect significant growth as a consequence," Nevill said.
According to the United Network Equipment Dealer Association (UNEDA) Cisco equipment makes up 90 per cent of a used networking market worth $3bn annually.
However, UNEDA secretary Neb Altinis said Cisco has traditionally held an "almost belligerent" stance towards the secondary market. "For years, Cisco did not want to acknowledge it existed so the fact it is aligning with a distributor is a big step in the right direction," he said.
Altinis said Cisco would reap the benefits if it worked more closely with UNEDA and its 300 members, about 20 of which are based in the UK. "If Cisco embraces the second-user market it will help its bottom line as it can underwrite $3bn of services. We are hoping the relationship improves."
Matt Jordan, sales director at UNEDA member tinglobal, agreed that Cisco has traditionally played down the second-user market.
"That Cisco is embracing used equipment and delivering it through some of its larger partners adds credibility to the space," he said.
Andy Brocklehurst, UK and Ireland distribution lead at Cisco, said the second-user market has gone "from strength to strength".
"The announcement with Comstor is an extension of this commitment [to reduce our environmental impact], but with the creation of a new revenue stream factored in," he added.
"This is yet another example of Cisco continually looking at new ways to provide partners with new growth opportunities and increase their profitability."
Simon Welch, product marketing director at rival Cisco distributor Azlan, said. "It seems odd that some people are bigging up remanufactured at a time when Cisco has a number of extremely aggressive price points with new technology solutions."
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