Used Foundry Networks Hardware Remains in High Demand

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By Peter Gilberd

Summary: Demand for Foundry Networks hardware shows strong growth in correlation to overall market for used networking equipment.

San Francisco, CA May 22, 2006

I’ve recently been asked by others companies in our market space if I see the demand for used networking hardware increasing in the near future. It stands to reason that as more and more businesses expand and upgrade their networks, many companies will look at cost-effective solutions offered by equipment purchased on the secondary market. In much the same way car buyers can find substantial value purchasing leased automobiles, companies can receive similar bargains by opting for pre-owned network equipment. Network upgrades, company mergers, and assets liquidations can offer emerging businesses a fantastic opportunity to acquire powerful gear at bargain pricing.

In recent years, the trend towards used networking hardware has continued to surge. Drawn by the lure of lowering operation expenses, and the relative durability and extended useful life of second-hand IT equipment, a significant majority of IT professionals are turning to the secondary market for their technology demands.

According to a recent CIO survey, 77% of companies currently use refurbished equipment to run their networks. Many reported that the incremental performance advances of new technology rarely justified the capital outlay required to purchase hardware new. In addition, many companies sited the compatibility with existing networking equipment as a major consideration. With projected sales of routers to service providers expected to exceed $5 Billion in 2006, the market for refurbished IT hardware looks to gain significantly.

Foundry Networks is poised to benefit from this increased demand. According to a Dell’Oro report published in Q106, Foundry ranks number 4 in a total market share of over $3,659 Million, an improvement from the previous quarter. In addition, Foundry ServerIron application switches rank number 1 in the worldwide market share for total port shipments and Gigabit Ethernet growth, and are the best-selling content switch and server load balancing solution on the market. With an industry-leading 90% growth over the year 2003-2004 and the price/performance ratio of Foundry Products, it’s no surprise that the demand for used Foundry Networks has increased in kind.

As companies outgrow their existing network hardware, products like the ServerIron become readily available on the secondary market. For emerging companies looking to bolster or upgrade their network, many are looking to Foundry Networks products for their investment protection and full-feature set. With newer models being acquisitioned all the time, buyers in the secondary market are constantly gaining access to newer technologies at bargain prices. With almost 50% of CIO’s survey saying they expect to increase their spending on used gear in the next 18 months, it stands to reason that there will be a significant increase in the market for Used Foundry Networks products.