Soft economy lifts the Cisco gray market

When the economy is down the Cisco gray market wins. That's according to Bloomberg, which has a story  up about  Liquid Technology, which buys surplus IT equipment and resells it. Richard Greene, Liquid's VP of operations describes Cisco as a "cherry product" that "we can turn over fairly quickly." The Bloomberg reporter notes that there were no Cisco routers left on the shelves at Liquid's warehouse in New York.

The article quotes numbers from the Yankee Group, which predicts the gray market to account for 14% of technology sales next year, up from 8%. Zeus Kerravala, an analyst at the Yankee Group is cited as saying that the $25 billion market for servers and networking devices may be among the hardest hit.

Barry Shevlin, CEO of Network Liquidators, is quoted as saying that liquidators have seen a 50% rise in sales of Cisco gear this quarter.

But such liquidators aren't the only ones profiting from "Cisco scrap". As Brad Reese reports in his blog today, Cisco itself turned 6 million pounds of Cisco product returns (the return of used equipment under Cisco trade-ins and take-back/recycling programs) from an $8 million expense into a profit center that contributed $100 million to the Cisco bottom line last year.

More from Cisco Subnet:Cisco upcoming blade server to run Linux?10 popular 2008 posts by the Cisco Subnet blogger communityCisco scrap turned into $100M goldmineCCVP: Choose wiselyCisco Subnet's top 10 Cisco stories of 2008Under the hood: Cisco unified communicationsCisco News and Review podcastJimmy Ray Purser Networking Geek to Geek podcast Cisco Subnet for more Cisco news, blogs, discussion forums, security alerts, book giveaways, and more.

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