10. Secondary Market In the News “ Put the secondary-market gear in operation when you have a problem," says David Willis, chief of research at Gartner…"Same-day service costs about 20% more than next day, so this strategy could cut your maintenance costs...” NetworkWorld “ In order to keep the entire edge on a five-year refresh cycle, the company might buy some used switches...” SearchNetworking.com “ Providers of secondary network equipment answer a market need for quality products at reduced costs…network managers increasingly understand the viability of having an alternate procurement channel…The secondary equipment market is also providing a strong challenge to OEM maintenance and support in terms of quality and cost.” Eric Goodness Research Vice President, Gartner Inc. “ Who's buying used gear? Better to ask who isn't. The customers of secondhand equipment range from small businesses operating on tight margins to Fortune 500 companies and global telcos.” InformationWeek
NHR is not a broker. We are an independent network equipment reseller with a focus on stretching IT budgets. We have a long history – more than 20 years-- in the secondary market as a reseller of pre-owned equipment, and today we also carry new equipment and a portfolio of network services. Our goal is to be a single trusted source for your IT department providing a range of top-quality network hardware and support services that cost less. NHR has 6 locations around the globe and more than 250 employees. At approximately $200 M in revenue, we have the resources to support the needs of the world’s largest telecommunications companies, but an offering that is ideal for cost-conscious mid-sized enterprises and cash-strapped non-profits. We’ve recently been honored as one of VAR Business magazines largest 500 resellers in North America and listed among Inc magazines fastest-growing American companies.
As I mentioned NHR has a number of international locations, and the face of our business today is truly global. About 1/3 of our annual revenues come from our operations outside the U.S. Markets like Germany, France, the UK and Canada show continued strong performance as we experience rapid growth in Asia. We have made a commitment to our international customers with facilities around the world and growing sales and technical staff in each region to support the many languages in the many countries we serve. NHR is unique among secondary market providers as a resource for global businesses.
So what do we do. Our roots are deep in the secondary market, but today, NHR has much more to offer. We can be a single source for a variety of network lifecycle services. Complete Network Hardware Fulfillment : Today we are the largest independent secondary market provider of Cisco Systems, and also carry other leading brands like Juniper, Foundry and Extreme. In addition we forge partnerships with best-of-breed manufacturers to offer their new equipment. These relationships include Force10, [Riverbed in APAC] [and a new partnership with Dell.] Our objective is to provide cost-effective solutions and flexible approaches that translate into precious time saved for our customers. You can call on NHR for a single purchase, or trust us for ongoing strategic network support. We also offer rental and leasing options to suit short term needs or immediate procurement when the capital isn’t available. Emergency Procurements : NHR is the ideal partner for emergency procurements with a large inventory of Cisco equipment – on average we have 2,500 unique Cisco SKUs in stock, a selection that rivals that of Cisco Refub. This inventory allows us to deliver many items next-day, current generation, previous generation and even EOL equipment. When time is critical or you don’t have a the right talent available at a location, take advantage of NHR’s pre-configuration services. We will ship your equipment fully configured to your specifications so that it can be simply put in place and turned on when it arrives. When resources are tight, having a resource for emergency replacement is invaluable. Uptime Optimization Services : We are a great source in emergencies, but we also like to help our customers be proactive to maximize network uptime. Our Cisco Sales Expert certified account managers and highly-trained technical staff can help you assess your network to optimize planning upgrade cycles, equipment purchases, and warranty coverage. From NHR you get unbiased technology comparisons and cost saving alternatives that no OEM or VAR will offer. Many NHR customers take advantage of pre-owned spares to avoid costly same-day service contracts while providing the fastest possible recovery from equipment failure. We also work with our customer to assist in disaster recovery planning and off-site depot-ing of critical hardware. Technical Support & Services : In 2008, NHR responded to customer demand for alternatives to SMARTnet and other expensive OEM service offerings by expanding its own services portfolio. Today we offer NetSure – a maintenance program that includes 24x7 technical support and guaranteed [next-day] equipment replacement at a fraction of SMARTnet contract prices. Our customers are reducing maintenance costs as much as 80% just by moving some Cisco equipment to NetSure. We have also added installation services for our customers worldwide, so one call to NHR now orders the equipment and makes sure it is expertly installed in any of your locations around the world. We also provide full network design services in some major markets. We are continuing to expand our services to deliver customers end-to-end network support. Asset Recovery : At the end of the equipment lifecycle, what do you do? Sell your equipment to NHR and earn money as well as points for being green. NHR provides cash or trade in credit – more credit than our customers typically report being offered by Cisco. And, by selling and buying used equipment, your company is playing a big part in reducing electronic waste in the world’s landfills.
That’s an overview of our entire offering, but I want to take a moment to focus on a couple of areas in detail. First, it isn’t unusual to have some skepticism about used equipment – Will it work? Can this company support my network? The answer is yes. There are many reasons that companies work with NHR for pre-owned equipment. First, of course, is the savings… But, you maybe surprised that for many organizations, money isn’t the deciding factor. Often speed of delivery is what brings them to us. This is particularly true from the many regional telecommunications companies that work with NHR… Many large enterprises choose NHR because we can support older equipment… Frequent upgrades are incredibly costly, and not always beneficial… Finally, equipment from NHR works. We sell high-quality equipment that has been rigorously tested. We stand behind what we sell with a free one-year warranty and our own maintenance programs. Our dedicated account managers go above and beyond for their customers to make sure that you can have complete confidence in your purchase.
Next, I’d like to provide a little more information about our NetSure maintenance services. NHR is providing IT departments, for the first time, with a viable alternative to manufacture maintenance. With SMARTnet costs rising and budgets tightening, there is no better time to asses your dependence on OEM maintenance. We’ve designed our program to be affordable, but without taking any short-cuts on service. Save more than 50%: As I mentioned, some customers are seeing maintenance savings upwards of 80%. Our pricing is a fraction of OEMs, AND our contracts are based on the component rather than chassis. That gives customers the flexibility to cover just the equipment they want to, at a much lower price. Next-business-day advanced hardware replacement - [NOTE this will have to change outside US] Technical support 24x7x365 Cisco-certified technicians with hands-on network experience: We offer unmatched access to networking experts. You talk to a qualified technician who really knows the equipment the FIRST time. Responsive service, rapid resolution Support for Cisco, Juniper, Extreme and Foundry Current, previous generation and EOL support Flexible contracts; no re-certification fees
We are extremely confident in the quality of our equipment and services. We were the first in the secondary market to begin offering a free 1-year warranty, and last year we lead the market again by being the first to offer our own maintenance service. Our confidence comes from an unmatched commitment to operational excellence.
You may not be familiar with ISO and TL 9000 certification, so I wanted to share a little inforamtion. ISO 9901:2000 AND TL 9000 TL 9000 defines the quality management system that the telecommunications industry uses for all facets of product and service development and delivery, and it’s advantageous for companies that supply the telecommunications industry – like NHR – to follow the same quality system. The TL 9000 standards are derived from ISO 9001:2000, another more common certification that you may recognize. To earn our dual ISO 9001:2000 and TL 9000 certification, NHR’s customer care, procurement, equipment testing and order fulfillment processes underwent a rigorous, independent audit to ensure they met elite standards. Our processes include capturing key performance data that allows NHR to track performance in all these areas, address any problems and continuously improve our results. NHR is among fewer than 500 companies world wide that have achieved TL 9000 certification, and among a very elite group of pre-owned networking equipment resellers. At this time, we are one of only two that currently hold this coveted designation telecommunications procurement and refurbishment services. QuEST FORUM QuEST Forum is an organization of telecommunications service providers and suppliers working together to improve telecom supply chain quality and performance through the implementation of TL 9000 standards. As a member, NHR submits measurement data to contribute to benchmark reports and collaborates with service provider and other industry suppliers to advance industry best practices.
There may have been a time when secondary market equipment wasn’t main stream, but NHR has developed an offering unlike the small broker stereotype. Today, leading analysts and publications are talking about pre-owned equipment as part of a smart IT strategy.
NHR customers represent all major industry segments, and we works with many of the world’s largest telecommunications carriers and equipment manufacturers. This is certainly an industry where network integrity is critical, and we are proud that we’ve become a preferred provider for so many. In addition to our retail customers, NHR also has a thriving wholesale business supplying smaller dealers. If you buy elsewhere, you may still be buying from us!
We don’t just assume customer satisfaction, we measure it. In our most recent customer survey, we earned a 4.5 out of 5 for customer satisfaction. We asked our customers to rate us across seven categories, to help us evaluate and improve our processes. Customer loyalty is something that has to be earned every time. We are proud to have thousands of long-time customers and many customers who depend on us throughout the year as a strategic partner for network fulfillment. In our recent survey nearly 80% of responding customers said they bought from NHR up to 10 times a year. Our goal is to make each purchase as easy as possible.
The next three slides tell the stories of some of our customers, and how they have been able to reduce costs and improve network performance with NHR.
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