Auction action

Kurt Anderson does a lot of buying on eBay. "The key is to never be in a panic," he says. "Instead of getting into a bidding war, I'll wait and look around ... and eventually those jewels will come along."The "jewels" in this case are not antique tea sets or first-edition Twain novels. They're Cisco routers, Compaq servers and 3Com Ethernet switches. Anderson, president of Honeycomb Internet Services, a Minneapolis Web hosting firm, is one of many network professionals who swear by online auctions as a way to buy good network gear on the cheap.

The story is well-known: The demise of the dot-coms and growing vendor inventories due to a slumping economy have put a glut of equipment on the market, with much of it selling below list price.

Auction sites such as eBay, Yahoo and uBid all have pages devoted to networks and IT, which are always active with buyers and sellers. The power of online auctions has even been embraced by large IT vendors such as Microsoft, which is integrating eBay into its .Net initiative, and Sun, which has sold more than $10 million worth of equipment directly through online auctions.

As of last Wednesday, there were 4,027 network products up for auction on eBay, ranging from Marconi ATM routers to 3Com hubs and RJ-45 connector crimping tools. But Cisco is the dominant brand on eBay's "Networking and IT" pages, representing almost half the products being auctioned.

Among the hottest items are the Cisco 2500, 2600 and 3600 series routers. While a new 2500 can cost between $1,600 and $2,000, bids for these devices can hover between $200 and $600 depending on how many parties are interested.

"We save about 50% to 75% off of list price by buying products from eBay," says David Hicks, an advanced systems developer at the University of West Florida in Pensacola. "The equipment you get from eBay sometimes has some scratches, but it usually works just fine."

Hicks uses gear purchased from eBay to outfit the university's testing lab, where he and his staff can test applications and server cluster configurations. He recently bought two eight-port Dell Fibre Channel switches on eBay for $1,200 apiece, which would have cost $8,000 new.

When systems are ready to be moved from the lab to production, the university usually purchases new equipment for the project, he adds.

Others trust the equipment bought at auction for their production networks.

"This is live stuff in our network," Honeycomb's Anderson says of his eBay-purchased gear, mostly Cisco routers and switches. "We're not playing around with it."

Deals on servers are also available.

"I'd rather buy name-brand servers even if they're two or three generations old," Anderson says. "I'm not worried about buying used equipment because I know how to fix it if there are problems. Saving money is big for us."

Anderson has purchased most of the 90 or so Compaq ProLiant servers in his hosting firm second hand, either from online auctions or used-equipment distributors he finds on eBay. Many of the products he buys at auction are still under warrantee, which is also a boost. "I've had technicians from Compaq come out and fix some of the servers I've bought off of eBay," he adds.

Wayne LeFrancois, a systems technician for Global Pacific Wireless Internet, a wireless service provider in Orange, Calif., buys Cisco routers on eBay for personal reasons: He's building a home network lab in preparation for his Cisco Certified Internet Engineer test. LeFrancois has already purchased five Cisco 2500 series routers, each costing $300 to $600.

"There is no way I would be able to afford this equipment if I bought it from Cisco," he says.

Joe Devlin, chief software architect for Gensym, a Massachusetts software firm, has purchased close to 100 pieces of network equipment on eBay for his company's test lab. While he routinely finds older routers that are 80% to 90% lower than list price, he says there are pitfalls users should be watchful for when bargain hunting.

"There are a lot of mature [router] product lines out there such as Bay, Cisco and Nortel where they're at Version 12 or 14 of the router operating system," he says.

"You might be buying something where [the seller] claims to have no idea how old it is, but they're selling something that has a fantastically out-of-date operating system on it," he adds.

Bringing a support contract up to date on an old product to get a new operating system version could cost 10 times more than the product bought at auction, he adds.

Buying used routers can also cause password problems.

"Almost every piece of equipment you get will have some kind of password on it," Devlin says. Although he's received some factory surplus gear where the password was never set, "more likely it'll be off a dot-bomb and the password will be whatever that company's network manager had put on it."

While resetting the password can be done by connecting a PC to a router's serial port and using a terminal program to access the router's operating system, users can avoid extra work by asking the sellers if they have the documentation and passwords, Devlin adds.

For larger companies, buying on eBay may not be worth the strain on existing relationships with key vendors.

"We buy all of our stuff through Cisco," says Bill Homa, CIO of Hannaford Brothers, a supermarket management firm in Scarborough, Maine. "We have an excellent relationship with Cisco; there's no reason to upset the apple cart."

Auction action

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