Cisco, Toyota, they’re both reliable, ubiquitous…and have high resale value
Cisco is the like the Toyota of the networking hardware industry – while not exactly on the lower end of the price scale, these established brands are known for their reliability and ubiquity.
Cisco and Toyota also have one other trait in common – high resale value.
Upgrading your phone system? Don’t trash the Cisco 7940s. Resell them and ease the pain of managing an IT budget that hasn’t been expanded since Bush was president (and we’re not talking Bush Jr.).
If you’re virtualizing your data center and no longer need a couple 3750s you have lying around, you’d be silly not to scoop up some cash for them – it’s a much better alternative than having them collect dust in a closet somewhere “just in case.”
Ok, that’s an easy argument to make – why wouldn’t you sell unused gear for credit on account or even cash?
One could argue that you should even consider a switch’s resale value when making the initial purchase, the way you might when buying a car. While not a top priority, resale value could be the tipping point between one brand to another.
So why is it that Cisco in particular can hold on to its value so well? Why do some people call them the “900lb Gorilla” and all of the competition “bananas”? For the same reason that support engineers will tell each other “oh yeah, well your vendor wears combat boots”. It’s perception. It’s precedent. It’s reputation. Cisco isn’t the best fit in all situations. (uh oh, my kool-aid is wearing off!) However, Cisco is adept at providing what makes sense when it makes sense.
Sniping the enemy with a howitzer might be fun at first, but time and cost quickly makes it cumbersome especially when a well-placed bullet will do the job. (I know, too many first person shooters for me.) Having 5000 10gig ports might sound fun, but does it make sense? Cisco isn’t always first to market with things but they do often innovate when it really matters. PoE, wireless N, and 802.3at are just some examples where Cisco was at the bleeding edge when it mattered.
Is it all about technology? No. Cisco also has huge service offerings and a large amount of vendors with trained engineers ready to help you choose, install, and configure your products. In addition, a reputation for products that last much like Toyota! The old adage that “no one was ever fired for buying Cisco” may not be entirely true but it became a saying for a reason.
However, it’s no secret that HP and Juniper are both directly after Cisco’s networking offerings, and now Huawei has intentions to scoop up some of market share as well. While this is indicative of larger industry shifts than just resale value, the success of Cisco’s competitors in the networking hardware market will certainly affect it.
So the question remains: will Cisco always dominate in resale value? Or, much like Subaru did to Toyota this year, will another player in the field eventually jump ahead and take the lead?
I am by no means a fortune-teller, but it spells interesting times ahead.
—Original sources by Frank Kobuszewski from Network World