Sunday, 24 April 2011

Rent to Buy

Try before you buyHave you ever gone out and made one of those big purchases – the sort that you plan for ages and really look forward to – only to get your new toy home and find that, really, it's a bit of a disappointment? Go on, be honest with yourself. We've all been there.

Often, there's little you could have done to avoid such a situation. Such disappointments are often not due to a lack of pre-purchase research and product comparison, but only make themselves felt once you start actually using the product.

Take a test drive
Most of us are familiar with addressing this problem when buying cars. Few of us, after all, would buy a car without first taking it on a test drive. Of course, before doing that you'd decide on the make, model and features you're after, and check out the cost. You might have to drop this feature or that in order to keep the cost within your means – you might even have to change to a different model – but you wouldn't place an order until you'd test driven the car you'd settled on. You'd want to know what it's actually like to drive. After all, that's what it's for. Driving.

Having made your decision, you might decide not to buy the new car outright, but to pay for it over a period of time, maybe three or four years. For business use, you might decide not to buy it at all, but to lease it. These approaches, while usually more expensive than outright purchase in the long term, offer great benefits in both cash flow and flexibility terms.

Rent it!
Network equipment can be acquired in similar ways: outright purchase, staged payments or by renting it.

Renting can offer significant benefits – it can be a highly convenient, flexible and economical way of acquiring the kit you need. Even if you decide to purchase the equipment outright or via staged payments, it can be most useful to rent it first in order to perform longer-term in-situ testing. Such testing can give you a much higher degree of confidence that the new equipment will do what you need it to do when installed in your network, in turn increasing the chances of a successful purchase, and keeping everyone happy – including your finance department and boss!

Renting means savings
The principal goal of this series of networking tips is to help you save money – to control capital expenditure. That goal is even more important now than it was a couple of years ago when we started this series. With the economic climate as it is, capital budgets are under much increased pressure.

Renting removes the need for major capital expenditure on network kit. Instead, it is funded via a series of regular rental payments. These are typically orders of magnitude smaller than the outright purchase would have been.

Tax savings
Perhaps the biggest financial benefit of renting is in the the tax savings it realises. Outright purchases must be accounted for through capital allowances, while rental fees can be charged directly against revenues for corporation tax purposes. Significant savings in tax can be achieved, as well as removing the need for major capital expenditure.

There is another, less immediately obvious, way in which renting can save you money, though – less obvious because it has to do with the end of the device's useful life on your network. Obsolete products are typically more difficult to dispose of. If you need to source a product which is near, at or beyond its end-of-life, then consider either purchasing it refurbished, or renting it. By renting, you can remove the risk of finding yourself at a later date left with an obsolete product that you can't resell.

At Go Communications many of our customers are regularly mixing outright purchasing with renting to help them address the new financial constraints that they must work within the current economic climate.

Minimise your exposure to financial and other risks. Take your new network kit for an extended test drive by renting rather than purchasing outright. If it doesn't work out, you'll have minimised or completely avoided any egg-on-face. And if it does do what you hoped, then you'll find yourself everyone's new best friend – your customers, your boss and perhaps even the bank manager!

Thursday, 24 March 2011

Use Serial Number Tracking

Protect yourself with serial number tracking
What factors do you consider when selecting a network devices supplier? Price? Product availability? Quality control? Good reports from existing customers? Those are all excellent criteria. There is another issue to check out, though, and while it isn't as immediately obvious as others, it is fundamentally important.

It is this: choose a dealer with robust, reliable and comprehensive serial number tracking technology in place. I cannot over-stress the importance of this. Only by tracking components at the serial number level can devices be identified precisely and thereby be dealt with appropriately. Product and part numbers simply aren't good enough.

How's your insurance?
To illustrate this point, consider what happens if your home or business premises are damaged by fire or flood. In such a situation, you make a claim on your insurance company for lost or damaged items. That's the point at which you discover whether or not you are under-insured. If you are, then you're going to come out of the episode with less than you had before, rather defeating the purpose of having insurance in the first place, which is, of course, to protect you from loss.

With the benefit of hindsight, therefore, you might decide to make sure you're adequately covered by listing everything you own, noting the value of each individual item. It you're anything like me, always shopping around for the best deal and therefore getting more for your money, you could well be surprised at just how long the list turns out to be, as well its total value.

Armed with this list, you'll be in a position to make sure that your insurance gives you adequate cover. Now, when disaster strikes, you won't be left short, on top of all the other inconvenience that such crises always involve.

Get a tracker
Good network specialists display the same obsession with detail when it comes to tracking the devices they supply. Rigorously tracking serial numbers enables them to provide swifter and more effective support: they know exactly what they are dealing with, right down to the detail of software versions and installed options.

They will also know immediately if they receive as a return from a customer a device that they didn't originally supply. That means they don't have to absorb the cost involved in such situations – cost which must, inevitably, be passed on to their customer base. Additionally, if they can track devices by serial number then they will be able to maintain a record of test logs for each device, further improving their ability to provide swift and effective service.

All network specialists have equipment spread out over a number of sites – their own and their customers. When devices fail, as of course they do from time to time, a supplier's ability to respond effectively depends heavily on how comprehensive and accurate their picture of the failed device is. In short, using a supplier with no serial number tracking is likely to mean longer periods of network downtime.

With comprehensive information and serial number tracking your supplier can maintain accurate records on order and delivery dates, warranty windows with both their suppliers and you, as well as a host of technical information on each device they have supplied to you. With all that information at their fingertips, they are in a position to make very swift decisions as to the best approach to solving any problems that may arise. That's good for you, because you suffer less downtime and enjoy a more productive network. And it's good for them, because happy customers tend to come back for more, and to recommend their suppliers to others.

Do it yourself
The same principle should be applied to your network: make sure you always know exactly what is installed on it, and its value, by tracking all network component not only by part or model number, but also by serial number.

Serial numbers are the key not only to swift diagnosis and remedial action when it comes to failed components, but also to knowing the true value of your network devices. Any given device model may be available over its lifetime in dozens of different variants. Assorted options and enhancements, as well as different hardware and software revisions can mean huge differences in value, whether you are considering replacing devices after loss or damage or selling them on as second user equipment.

Go Communications' business is entirely focused on second-user Cisco Systems devices, so it's no surprise that we are frequently approached by companies that have devices to dispose of. Sadly, in most cases all that the prospective vendor can give us is a list of part numbers. With the serial numbers, we would in many cases be able to make a better offer, and of course the potential vendor would be in a position to negotiate more effectively with any prospective buyer.

Protect yourself from future shocks and get the best price for your retired network kit. Track network devices by serial number, and make sure your dealer does the same.

Monday, 21 February 2011

Exploit manufacturers trade-ins

Don't chuck it, trade it in
If you've been following this series of money-saving tips you'll know that I'm a big fan of redeploying and reusing network devices that are no longer suitable for front line work. Even I have to admit, however, that there will come a point at which you'll have no further use for various pieces of kit.

Don't throw those old devices out yet, though. They could still be worth a lot to you.

Any manufacturer's default position will be to sell you the best, most profitable solution for your needs, from stock, at list price – end of story. Most manufacturers have a trade in programme, however (although their sales team may not mention it if you don't raise the issue) and it's possible to make huge savings. So, while your specifying kit and negotiating prices, take an inventory of your pensioned-off devices and explore trade in options.

Out with the old, in with the new
Let me take you once again on a trip to the car showroom. Generally, when buying a new car, you have the associated challenge of disposing of the old one. There are two approaches you might take: sell it privately, or trade it in for the new one.

Usually, most car dealers will much prefer you buy your car outright, without any trade in. Disposing of your old vehicle, unless they happen to have a buyer waiting for it, means extra work for them and extra expense. They're quite happy for you to take on that work and expense.

Some car dealers, though, have recognised the fact that you and I really don't want to be spending our leisure time trying to sell our old cars, and have made the trade in offer a standard part of their service. As a result they can offer you a good trade in value on your old car, saving you a significant amount on your new purchase and freeing you of the need to sell your old car yourself. Excellent!

Don't miss the trade in opportunityThere is, of course, a parallel with your network here. I'm frequently approached by companies looking to dispose of their old network equipment. While I'm happy to make an offer for such kit, I always wonder why they didn't look into the possibility of a trade in. Were they unaware that it is an option to explore? Did they think they had as good a price as they could get on their new network equipment? Whatever the reason, had they secured a trade in, they could have ended up saving thousands.

A very attractive characteristic of trade ins is that everything is negotiable. There are, for example, no 'golden rules' stating that all traded-in kit must be under six months old, or must be returned within 14 days. You can negotiate a trade in deal that not only saves you significant amounts on your purchase, but also suits you in terms of logistics. That could be invaluable in the situation where you need to trial run your new kit alongside the devices it will be replacing, before pulling out those old devices.

Trading in is always an optionManufacturers know that the more savvy the customer, the more likely they are to be tempted away to an alternative supplier. And if you should move to a new supplier, they know that in this industry, you could be with them for three to five years. That's a long time, and a lot of lost business – and that's before they even think about the work they'll have to do to win you back.

Because of that, while they may not mention trade ins as an option at the outset, or even at all – the manufacturer's preferred result is a straightforward sale of new kit, without the complications of a trade in, after all – you can be confident that the option is there.

Finally, if your manufacturer makes you a derisory offer for your trade in kit, give us a call at Go Communications. We'll happily quote you for the kit, and while we can't, of course, guarantee that we'll be able to make a better offer than your manufacturer, there's a very good chance that we will. Refurbished network devices are our core business, after all.

Whichever approach you take, don't write off your old kit. It could be worth thousands off the cost of your next network upgrade. That's the power of the trade in.

Sunday, 23 January 2011

Plan ahead

Know what's coming – and plan accordinglyWhat will your network look like in ten years' time? 100 Gig to the desktop, with a 10 Terabyte backbone? Hi-def video apps for every user?

If that sounds like a pipe dream, it's worth noting that right now the clever money says that over the next few years, 90% – yes, ninety percent – of Internet traffic will be accounted for by video. That's a huge figure and can only mean one thing: a huge upsurge in overall traffic volumes.

Hi-def the way forwardI'm a big movie and sports fan, and I already frequently check out the TV guide to see if the big game or blockbuster is being shown in HD. I take the view that good movies and great games are to be savoured, and the only way to watch them is in HD. I'll even avoid watching a classic in standard definition – I'd rather wait until it's broadcast in HD, so I can enjoy it to the full. That probably gives you some idea of how I view HD. I think it's brilliant and I'm convinced it's the only way to watch. I'm absolutely certain it's where all broadcasting and video, online and offline, is headed.

I'm far from the only one who takes that view. There's a growing army of people who love HD, and those people will drive explosive growth in Internet and LAN traffic. It's not a question of if, but of when.

Exciting times aheadClearly, traffic growth of this magnitude must be planned for: failure to plan here will very much be a matter of planning to fail. The traffic will be there. The question is whether your network infrastructure will be up the task of handling it. I can't see anything else, with the possible exception of cloud-enabled technologies, coming close to HD in terms of its impact on network traffic.

SD video has of course already had an impact on traffic. A colleague working in the IP carrier sector told me that September 2008 saw an exponential growth in Internet traffic – growth that he put down to explosive growth in the use of video sites. Requiring around ten times the connection speed that most home users currently enjoy, HD's effect on network traffic will make the impact of SD video seem like a minor blip. It's going to mean major re-engineering of Internet and LAN infrastructures across the globe. Exciting times are ahead for anyone working in the networking field.

Protect your core network
How should all this crystal ball gazing affect network managers right now, though? Firstly, it's important to be clear, especially in the current highly cost-conscious environment, where cost cutting should and should not take place. For almost all businesses, network infrastructure is an absolute essential and should as far as possible be considered sacrosanct. A robust and highly-performing network infrastructure is vital today, and with the increasing adoption of technologies such as HD video, will become all the more so in the future. Your baseline position should therefore be always to protect your core network.

Modern businesses are so reliant on their IT networks that it's probably fair to say that many, maybe even most of those businesses who fail to invest sufficiently and appropriately in their network infrastructure will fall by the wayside as HD video makes its presence felt. It will be companies who have cutting-edge communications technologies like HD video in mind right now, and who plan effectively for their take-up in the immediate future, which will prosper and succeed.

Keep the future in viewYou may not be able to afford to upgrade your network to support HD today, or next year or even the year after that, but you do need to recognise that over the next five to ten years you will need to do so. You need to be looking not just a year or two ahead, but a generation ahead: any decisions you make today could have significant implications for your network and finances in the coming years. Whatever you specify for your network, you should have in mind not only its immediate use but also the ways in which it could be redeployed in the future.

In line with my earlier tip on the general reuse of network equipment, the approach to take is to start moving towards a video-friendly infrastructure now, so that when the heavy HD traffic starts to hit in a few years' time, you'll be able to migrate the devices you specify today out to the periphery of your network, replacing them with current products in the core and giving you a bang up-to-date HD-capable network.

It may not be state-of-the-art in the sense that cash-rich corporate giants' networks are state-of-the-art, but it won't be far behind, and you will have achieved it at far lower cost. It will put you in a great position to take advantage of all the benefits that HD video will offer, giving you competitive advantage in the market, and, ultimately, boosting your business' bottom line.

All because you planned ahead.

Tuesday, 21 December 2010

Use a dealer that's less than 4 hours away

It's not that small a worldI'm a big fan of ebay. My wife isn't so enthusiastic, though. Despite the fact that I've used the site to buy loads of great things and only had any problems on two occasions, it's those occasions she's quick to remind me about whenever I mention it. I know the value of a quiet life, and both of the less-than-straightforward transactions happened to be with overseas suppliers, so I now make a point, whenever possible, of only dealing with UK ebayers.

If you're a regular reader of these tips, it probably won't surprise you to learn that there's a parallel here with network infrastructure purchasing. Let me make one thing clear right away, though. I'm certainly not making a blanket statement ruling out all overseas or long distance purchasing. Indeed, right here at Go Communications we have a large number of very happy Cisco maintenance spares customers right around the globe.

If it's mission critical, keep it localWhat I do want to say, and say loud and clear, is this: for mission critical network support, your key suppliers should be local. The world may be smaller today than it was a decade or two ago, but shipping parts still takes time: generally it just isn't feasible to get network components from a supplier in one country to a customer in another in less than a day or so – and that's when everything goes smoothly.

Almost all networks have one or more mission critical segments, demanding four hour or perhaps eight hour coverage, whether that be from phone call to fix or to initial response. Whichever of the various permutations apply, your maintenance supplier will have made arrangements with a local courier depot, broadly speaking centrally located between you and their other customers in the area, so that it can meet the demands of its SLAs with all those customers.

Local engineering and warehousing That sounds good – and it is good. But it's not enough. You need a supplier, for those mission critical parts of your network, which is actually based near to you. More specifically, you need them to have local engineering and warehousing facilities, not just admin and sales offices.

It's all very well having spares couriered from a local depot, but when the spare itself proves faulty or incorrectly configured for your needs (and, yes, it does happen) the backup unit or engineering resource being at the other end of the country can spell serious downtime for that mission critical network segment. Unless you feel like stumping up for helicopter deliveries.

Build your defencesOf course, selecting a supplier with local warehousing and engineering facilities doesn't guarantee that they'll have a second spare in stock when you need it. It does at least make it possible, though. It's a tick in a safety box, and when it comes to mission critical network segments, you want as many ticks in safety boxes as possible. Each one increases your defences against network failure and downtime.

As well as reducing the chances of serious network outages, using maintenance suppliers who are local to you may well get you a better deal financially, because of their lower shipping costs. And it will all go to help make for a quiet life and reduce the danger of your being smacked over the head, verbally or otherwise, for going with the wrong supplier. In my book, that's got to be a good thing.

Monday, 29 November 2010

Reduce purchasing new equipment

Canny purchasing in difficult timesThe economic downturn resulting from the global debt crisis of 2008 has made itself felt in all corners of the market, and its impact is on-going. For network managers it has meant slashed budgets as businesses and other organisations seek to make significant financial savings. For some, the cuts have already hit. For others they are still filtering down through the financial system. For almost all, though, it's just a matter of time: few businesses are likely to escape unaffected.

Such cuts put network and IT managers in an unenviable position. They must, of course, operate within the finances available, but they, better than almost anyone else, know how dependent modern businesses are on their networks. Every network manager must defend their network (and especially their core network) not least because, if it is compromised, they will be first in the dock when the stewards' enquiry begins. There is a substantial financial circle to be squared.

Buy less?Let's take a good hard look at the situation you could be facing. Cuts in your network budget are either with you now, or on the way. If you are one of those looking at substantial cuts, you could be forgiven for thinking that your options are strictly limited to a drastic reduction in what you will buy, across the board. That's not necessarily the case, though. Instead, consider reducing the amount of new equipment that you buy.

You may normally buy all or most of your network equipment brand new. When budgets are generous, such a strategy can be ideal, for various excellent reasons. Adopting a policy of buying refurbished equipment can save you thousands, though. And these savings can be taken further. To maximise them, canny network managers don't simply specify product X refurbished instead of product X brand new. They pay very close attention to exactly what device is specified for each network requirement.

Supply and demandWith a well-rounded understanding of the market, careful device selection can pay significant further dividends. For example, many large networks are currently decommissioning 10/100 speed kit in favour of gigabit and ten gigabit devices. As a result, the market is awash with 10/100 product, and the immutable law of supply and demand is making prices rather attractive. Predictably, 10/100/1000 is following suit. By specifying refurbished 10/100 devices for network segments that will run happily at these speeds, you can retain as much of your reduced budget as possible for your core network while minimising degradation of your peripheral network performance.

That brings us to the heart of the matter. In harsh times, all these money-saving tactics should have one goal: the protection of your core network. Virtually all businesses today are utterly reliant on a robust core network. Cuts to that core network will almost inevitably impact bottom line business performance – possibly seriously, or even disastrously. Protect it at almost any cost. Buy refurbished devices in preference to new, specify lower performance where you can get away with it, and even cut peripheral network services if necessary, but use the savings, which can be substantial indeed, to maintain your core network.

Then, when easier times come, you'll have a solid, up to date and robust foundation on which to build up additional network services and performance.

Tuesday, 12 October 2010

Buy refurbished kit from the manufacturer

Beware end-of-lifeWhen a network device is declared end-of-life its value on the used market typically plunges, drastically reducing the price it can command at resale. As a result, buying devices brand new shortly before they go end of life is a risky business that can cost you dear. The savvy network manager knows his product lifespans and wherever possible opts for refurbished alternatives in preference to brand-new near end-of-life products, saving thousands.

If you are a regular follower of these money-saving tips then my interest in cars, and sports cars in particular, probably won't have escaped your notice. For the last three years, though, my focus has been on building Go Communications into the respected supplier of refurbished Cisco Systems kit that it is today, and during this time I've been without a sports car. This year, with Go Communications established with a solid base of happy customers and strong sales figures, it was time to take a closer look at the sports car market, with a view to spending some money.

Actually, when I say "look at the market" I'm not being one hundred percent honest. I've known for a long time what car I'd be buying – in my book there's nothing to beat a Porsche 911. On checking the market out, though, I discovered that the Stuttgart boys have a new 911 waiting in the wings, due out next year, which of course means the current model is near end-of-life, and its resale value will very likely suffer when the new car is released in 2011.

Network managers often face the same situation. New kit is required for this project or that, and some of the devices on the shopping list are about to go end-of-life. Heavy depreciation and therefore higher over-all costs beckon, unless some canny buying tactics are deployed. There are three approaches that can be used to get the best long-term value in such situations.

New infrastructure, refurbished sparesMy personal preference would be to buy all my core network infrastructure brand new, direct from the manufacturer, and all my spares refurbished. This allows me to specify the best core infrastructure available. After all, there's little point in specifying brand new spares if it means you have to cut corners on the kit that your network will actually be running on. By adopting this approach and holding refurbished spares yourself instead of committing to an expensive maintenance contract with the manufacturer you can build a premier quality network and stay within your budget.

Refurbished throughoutBuying all your kit refurbished – core infrastructure and spares – can offer advantages, since the hardware is all 'tried and tested'. Over the last 14 years in network infrastructure sales it's been abundantly clear to me that there's not much to choose between the failure rates of tested used devices and brand new. The old IT adage generally holds true: if a device is going to fail, it will normally do so in its first couple of weeks. And, of course, there are significant financial savings to be made, assuming that an absolutely state-of-the-art network is not your objective.

Refurbished from a dealerThis is essentially a refinement of either of the above approaches. Instead of buying refurbished equipment directly from the manufacturer – the ultra-safe approach – savings can be made by sourcing your refurbished kit from a dealer. In 99 cases out of 100, this will be less expensive than sourcing the same devices from the manufacturer.

The downside is that in the event of a failure, the spare itself may not be supported by the manufacturer. In practice, this simply means that you need to approach the dealer for support, not the manufacturer, so choose your dealer with care.

The best bet is to choose a supplier which not only has a reputation for quality, but has gone out of its way to support that reputation with an internationally-recognised quality standard such as ISO 9000.

ISO 9000 quality controls are typically stricter than those enforced by manufacturers on their dealers: if your choice is between an authorised dealer without a quality standard, and a non-authorised one with a quality standard, the latter is typically going to be the safer – and often less expensive – bet. More expensive does not always mean better.

So: buy cheap, but be wily. Don't sacrifice quality in favour of brand names. Do your homework and identify the best time to buy, the best product to buy, and the best source to buy it from. Play your cards right and you could make significant savings at the same time as improving the quality of the parts and service you're working with.