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Will the after effects of COVID-19 affect your IT Budget?

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Since the COVID-19 break out in December 2019, we’ve seen whole industries decimated in terms of revenue and product sales; particularly the airline, hospitality and retail sectors. It certainly highlights how the impact of a worldwide lockdown - which has only been in place 6-weeks - can completely destroy years of growth and progress within any industry sector.

Even with the various grants and furlough support packages that the Government have put in place; analysts are predicting a potential 30% increase in liquidations and insolvencies for the most impacted sectors due to downturn in sales from COVID-19; but most notably a large percentage will be SMEs that are the lifeblood of any growing economy.

As CEO and CTO of my company IntelligentServers.co.uk T/A Intelligent Brokerage Limited both myself and my sales team sell a wide range of refurbished/used enterprise computer and networking hardware manufactured by the three main vendors, HPE, Dell and Cisco to a wide ranging customer base; from small start-ups, established SME’s, as well as the large corporate PLCs and Blue-chips. We also sell to a good range of public sector organisations like schools, councils, government bodies and charities.

We’re hearing more and more, as COVID rattles on, from IT Managers that we sell our products and solutions to that they expect; and have already had their budgets; slashed by up to 90% over the next 12-18 months whilst the business focuses on stopping the haemorrhage of cash and somewhat regaining control of cash flow. Existing projects have been cancelled and new products have been put on the back burner. One IT Manager I speak to quite frequently even told me that his company might struggle to support hardware failures for ‘out of warranty’ critical infrastructure because the, already minute IT Purchasing budget, has been cut completely. In the event of a server or storage failure, he has been told to “squeeze more out of other servers and storage” by migrating Virtual Machines off failing hardware onto other working cluster servers, which will push his VMware cluster farm to the limit; most notably impacting UX and disaster recovery RTO.

With all this in mind and the effects of COVID-19 set to cascade and ripple through most industry sectors throughout 2020 into 2021; now is an even better time to explore the benefits of ‘Refurbished Enterprise IT Hardware’ over buying New.

Over the last 7 years, both myself and my sales team have sold a large range of Servers, Server/SAN, Server/DAS solutions and Networking solutions to over 6000 customers worldwide. All of our hardware, along with our packaged solutions are covered by our ‘Free 3 Year Hardware Replacement Warranty’ and our ‘Free 3 Year Remote Hardware Setup and Support’. This is the same 3 Year Warranty you would get from the vendors, but we go one step further by throwing in our free 3 Year Remote Setup and Support package.

One of the key benefits comes from the price different between ‘refurbished hardware’ and ‘new hardware’ usually above and beyond 80% cheaper when buying refurbished/used as opposed to ‘new’.

For example, a good spec’d HPE DL380p Gen8 with 2x E5-2650 8-Core Intel Xeons, 256GB DDR3 PC3-14900R RAM, 8x 900GB 10K SAS (7.2TB Raw Storage Capacity) and 2x 460W Power Supplies, will give you 32x logical cores, a boat load of RAM and a sizable amount of storage to store and easily run 20-30 virtual machines using VMWare, XenServer or Hyper-V and will set you back £1500 ex VAT. If you bought the a similar spec’d ‘New’ HPE DL380 Gen10, you’d be easily paying over £10k without any real benefit in performance, efficiency or resiliency.

If you were looking for a Clustered Server/SAN Storage setup that’s a bit more recent in terms of age you could go down the route of 4x HPE DL360 Gen9 Servers with a similar spec as the Gen8 configuration above with 2x E5-2630L 8-Core Intel Xeons, 256GB PC4-2133P RAM, 2x 600GB 10K SAS (RAID-1 Operating System) along with a HPE 3PAR 7400c that has nearly 100TB of “All-Flash” Storage using 1.92TB SSD Hard Drives - all for just over £35k ex VAT. A solution like this, new from HPE would cost well over £500k.

We had a school down in Essex purchase a large Cisco Network/Firewall solution from us in the first quarter of 2019. The school wanted to upgrade their existing HP ProCurve infrastructure that consisted of 1Gbit at the Core and 100Mbit at the Edge. The IT Manager wanted to upgrade the lot with 10Gbit at the Core and 1Gbit at the Edge. They had a few Resellers quote New HP ProCurve/Aruba solutions with most quoting over £350k. We came in at £80k using Refurbished Cisco Catalyst 6509’s at the Core, giving the customer multiple media types by using 1Gbit RJ45, 1Gbit SFP and 10Gbit X2 Line Cards; and Cisco Catalyst 4948-10GE’s at the Edge for 1Gbit RJ45 endpoint connectivity and 10Gbit Uplinks back to the Core Cisco Catalyst 6509’s. As we’d saved the school over £200k, the IT Manager had left over budget capital to upgrade his aging Dell R610 Servers to Dell R630’s, again saving over £90k by buying ‘Refurbished’ from us instead of ‘New’ direct from Dell.

These are just snippets from some of the cost saving examples that our customers have benefited from when they’ve taken the leap into refurbished hardware and continue to benefit from as they come back for more.

All of the hardware and the solutions mentioned above are supported by our ever growing technical team, free of charge, throughout the span of the ‘Free 3 Year Remote Hardware Setup and Support’ package that comes free of charge with any hardware part or solution that is purchased from IntelligentServers.co.uk and Intelligent Brokerage Limited. Most customers that buy our HPE 3PAR Solutions have never used or experienced the benefits that HPE 3PAR gives in terms of performance and resiliency, let alone how to set the thing up! This is where we step in and hold the customers hand once they’ve purchased and racked the hardware they’ve bought from us. Our engineers will login to the IT Managers workstation or laptop using AnyDesk and run the ‘Out of the box procedure’ with the customer as he or she is watching on. We will then configure the SAN into the customers’ existing 10Gbit Ethernet iSCSI or 8Gbit/16Gbit Fibre Channel infrastructure. IF the customer needs a hand integrating the 3PAR SAN or any of the Servers into their existing Hyper-Visor infrastructure, we’ll do all the leg work whilst they watch on, free of charge.

With all of the above in mine and the threat of COVID-19 decimating the global economy and IT Infrastructure budgets way into 2021, now more than ever, is a great time to think of new ways to squeeze more out of an ever dwindling budget and give ‘Refurbished’ a try.

Andy Hughes

CEO/CTO – IntelligentServers.co.uk T/A Intelligent Brokerage Limited

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