Business Model for Used Servers

cnet newsblog has an article about when used servers cost most than new

GALWAY, Ireland--Think of the Multis Group as sort of the Antiques Roadshow of the server world.

The Galway, Ireland-based company specializes in refurbishing, and then selling, used servers. Refurbished PCs and servers are increasingly in vogue because remanufacturing represents a more environmentally efficient way to recycle old electronics than harvesting components from these old machines or melting them down for raw materials.

Multis, in fact, plans to open a 70,000-square-foot facility in Union City, Calif., later this month to refurbish and sell servers for North American customers. That marks a reversal in the usual U.S.-Ireland tech relationship.

Unlike refurbished PCs and cell phones, servers maintain a high resale value that can equal or even exceed the cost of new equipment, said Multis CEO and founder Sean Keenan. Why? Manufacturers might produce only a single server model for 18 months to two years. Corporate customers, however, often don't want to migrate to new hardware that quickly. Instead, they move at a three- to seven-year pace. As a result, they often have a need for discontinued equipment.

People should consider contacting Multis to discuss end of life for their servers and an eWaste plan as part of creating a green data center.

Comments

[Corey Donovan]

I read this post today and it seems that Multis is misrepresenting some figures. Used Server equipment is very rarely ever more expensive than new equipment, maybe 1 in a 1000 features.

I’d say the price drop falls more in line like this:

1st year: 5-35% off new2nd year: 20-60% off new3rd year: 35-90% off new4th year: 50-95% off newAfter that it stays pretty stable other than an occasional anomaly.

Those estimates are based on my 8 years of selling used servers at Vibrant Technologies http://www.vibrant.com .

I wrote a post on our blog addressing the occasional uptick in pricing with old and rare parts here:

“IBM RS6000 Antiques Roadshow”http://www.vibrant.com/blog/ibm-rs6000-antiques-roadshow/“… from obsolete to coveted antique”

[Dave Ohara]

Corey - thanks for your comments, and I agree with your price assessment. If you think you have an interesting blog post for vibrant.com I would be glad to add it. For example, what is a efficient process for data centers to consider when taking into consideration reselling of used equipment?

[Holly]

So is Multis a liquidator or a recycling company?