Millions of dollars of Cisco gear, but unaffiliated with Cisco

Let me introduce myself in my first blog for the Network World’s Cisco Subnet.

I am the CEO of Network Hardware Resale, a big Cisco reseller - but unaffiliated with Cisco.  I believe we are politely called "the gray market" within the authorized Cisco world, though I've heard many more unsavory terms used as well. The reality is we often compete with Cisco, but also provide a tremendously valuable service to Cisco and the Cisco brand and here's why:

  1. Cisco is the most expensive equipment of its kind in the world, but it also has the highest resale value - because of the vibrant secondary market and for no other reason.  This brings the hardware TCO of Cisco equipment into the realm of its competitors (we'll dig into that).  Maintenance costs are another matter... (we'll dig into that too).
  2. Cisco, again due to price, has little to offer companies on a budget - they need the features of the high-end Cisco product but have a budget more appropriate to Procurve (more here too... HP is making strides).  These customers can buy a used/secondary market Cisco product, and most importantly (from Cisco's perspective, I would think) they are now a Cisco customer and not one of their competitor's.  Future purchases, expansions, maintenance, and software revenue flow to Cisco.
  3. Supply chain issues are plaguing Cisco and are threatening many customer relationships.  The vast majority of Cisco's most popular supply-constrained products can be delivered by a secondary market vendor in a few days, while Cisco would otherwise take months.

A standard Bio:

Mike Sheldon is the CEO of Network Hardware Resale, the world's largest secondary market reseller of Cisco equipment.  With approximately $200m in hardware revenue, NHR will sell over One Billion dollars worth of Cisco equipment (at list price) in 2010, making us one of the largest Cisco VARs of any kind worldwide.

Mike attended MIT before joining Swiss Bank Corporation (ultimately UBS) where he became the head of emerging market trading for North America, encompassing foreign currency, soveriegn and corporate debt, and derivatives trading.  He joined NHR in sales in 2001 and was named CEO in 2005.  NHR has grown from $25 million to over $200 million in revenue in that time.

SO... I am a big part of the Cisco world but come to the party from a uniquely outside perspective - probably one shared more by HP or Juniper than a Cisco VAR.  We see the Cisco products that fail and the technologies that languish (remember SRP?) before anyone else- because people are selling them to us when they should be buying. 

I look forward to offering my particular point of view about the issues surrounding Cisco and their products, services, supply chain, VAR programs and policies, competition with other manufacturers, and of course their presence in and treatment of the secondary market.

Suggestions and questions welcome!

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