History Repeats Itself: Failed Companies Flood IT Market With Used Stuff (DELL)


More bad news for hardware vendors: As companies shrink or even go bankrupt, the grey market of used IT equipment is getting flooded with inventory. That’s driving down prices at the same time people are looking to cut costs.

It’s a familar problem, because the same thing happened when the last bubble burst. It also means that companies like Dell (DELL) and Cisco (CSCO) are increasingly going to find themselves competing against their own stuff.

Bloomberg: The so-called grey market — supplied by equipment from failed businesses and shuttered offices — could account for 14 per cent of technology sales next year, up from 8 per cent, said Zeus Kerravala, an analyst at the Yankee Group. The $25 billion market for servers and networking devices may be among the hardest hit, he said…

Used equipment could account for 30 per cent of the total PC market by the end of the year, up from 10 per cent, said Rob Enderle, president of the research firm Enderle Group in San Jose, California.

“It’s a real problem,” he said. “In effect, they’re competing against their own stuff at a discount.”

See Also: Sorry State Of PC Industry Getting Worse