Saving the Earth one phone at a time

Agencies find advantages in using refurbished telecom equipment

Many folks in the Pacific Northwest take their environmentalism seriously, so when the solicitor's office of the Interior Department in Portland, Ore., which frequently deals with environmental law, had the opportunity to replace its obsolete phone system with a recycled system, administrative officer Desi Hummel saw it as a win-win situation.

'We love our new phones,' Hummel said. The office also saved 'a boatload of money' on the purchase price and monthly operating costs. And trading in their old phones kept the equipment out of the landfill for a few more years.

There is a large and growing market for used communications and networking equipment, said Frank Kobuszewski, vice president of technology solutions at network equipment provider CXtec. Anyone who has upgraded a PC probably has found that there is precious little demand for used computers. But routers, switches, private branch exchanges and telephones can have lives that extend far beyond the needs of a single customer or a product life cycle.

'Technologies and manufacturers are moving much quicker than the needs of many customers,' he said. 'Just because it is obsolete for one customer, it is not necessarily obsolete for others.'

CXtec sells and supports new equipment, but its equal2new line of refurbished products accounts for more than half the company's business, Kobuszewski said. They specialize in equipment from major manufacturers, including Cisco Systems, Nortel Networks, Hewlett-Packard, 3Com and Avaya.

CXtec, originally Cable Express Technologies, got its start in the government market selling IBM mainframes for the country's ballistic missile system. The government remains a primary market for the company. It has a General Services Administration schedule contract for its line of refurbished products ' GSA encourages the reuse of surplus equipment, and the Federal Acquisition Regulation allows the purchase of used goods.

'The government has been a significant growth area for us on both the buy and sell side,' said Scott Gregory, director of the CXtec government business unit. 'Our biggest trade-in partners are in the Defense Department. IPv6 has been a huge driver for us in the last six to nine months.'

Federal agencies are required to have network backbones enabled for IPv6 traffic by next year, which means they are pulling out a lot of working equipment that does not support the latest IP version. The company also gets equipment from liquidations, bankruptcies, and the latest wave of mergers and acquisitions in the banking industry.

Equipment is refurbished and repackaged to like-new condition, and the company claims a 99.51 reliability rate that it supports with a lifetime warranty on the equipment. The software is cleaned up to remove any passwords and to restore the proper default configuration, but security is not a major concern with the repurposed equipment, Gregory said.

Refurbished products range from old to almost new, he said.

'We have one customer in Texas who still buys IBM 8228 Multistation Access Units,' which provide connections to a Token Ring local-area network, Gregory said. 'Their applications touch the Token Ring and it still works, so why pay to upgrade?'

Some Navy ships use switching equipment discontinued by 3Com in 2001, he said. 'We found products the Navy needed to keep their ships running.'

The Housing and Urban Development Department traded in 4,000 analog telephone sets for credit on a new Avaya system when it upgraded the phone system in its Washington headquarters earlier this year.

The deal with the solicitor's office in Portland was nowhere near that size, just 31 phones. 'We had this really old telephone system,' Hummel said. It was a 15-year-old Key Service Unit analog system well past its prime. 'It was costing us a lot of money to run it, plus we were having a lot of phone problems. It was getting to be a real challenge to search all over the United States to find phones' when something needed to be replaced.

Moving to a digital PBX system would save the office 67 percent on monthly phone charges if it could afford the upfront cost of replacing the system. 'We don't have a lot of money,' Hummel said.

Fortunately, GSA happened to have a spare Nortel PBX discarded as surplus by the Labor Department when one of its offices moved. This was given to the solicitor's office.

'That saved us $20,000 right there,' Hummel said. 'The only things we needed were the phones and installation.'

She got the OK to take bids last year and ' on the recommendation of a customer in the Bureau of Land Management ' CXtec was invited to bid, along with major suppliers such as AT&T and Qwest. CXtec offered a choice of new Nortel phones, or equal2new Nortel phones at a 41 percent savings.

Not just price

'I chose the equal2new,' Hummel said. Even with the discount, CXtec was $10 per phone above some other companies' bids, but it was the only one with a lifetime warranty. 'And they were going to give me $18-a-phone credit' for trading in the old phones, she said. The credit coupled with the environmental consideration was really appealing.

The used phones work like new, and 'we're saving so much money a month with this' that Hummel sees no downside to buying used equipment.

'If I have a lifetime warranty, that's not an issue,' she said. 'Why pay 41 percent more if you can get the same thing in a used phone?'

The only issue she sees is awareness that good used equipment backed up by the vendor is available. 'It takes a little more work' to find, 'but it's worth it.'

CXtec finds the same challenge. The company spends a lot of time educating potential customers about the propriety of using used equipment. Sometimes the customer has no choice, Gregory said. One agency recently was in the middle of a major network upgrade when the manufacturer announced that the equipment no longer would be supported.

'People were torqued off,' Gregory said. But with used equipment, they were able to complete the implementation until the agency's needs caught up with the newer technology.

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