Network Hardware Resale (NHR) may soon need a new name. The used network hardware dealer has launched its own line of optical transceivers and might develop switching to support software defined networking.
At Interop NY last week, NHR, the largest independent seller of used Cisco equipment, unveiled carrier-class optical transceivers that interoperate with equipment from most of the major networking vendors. The company will sell the optics at 10 to 30% of traditional OEM prices.
Many networking pros complain that simple devices like optical transceivers are overpriced. "They understand there is no software in an optic," said Mike Lodato, NHR senior vice president of sales and marketing.
Other third-party companies have started selling cheaper transceivers, but the trick to the business is having the ability to test optics against a range of network equipment. NHR can do that since it already has extensive testing systems in place to package and sell used networking equipment, Lodato explained.
NHR is also able to order at volume to bring down the cost of the optics since it sold $20 million in optics last year and has an established customer base, he added.
SDN and the pre-owned network equipment market
While SDN has many traditional network vendors scrambling for a strategy, NHR sees the architecture transition as a chance to develop its own switches.
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Since SDN consolidates the network control plane in a centralized controller, SDN switches can be fairly basic. In that case, NHR could build simple switches with commercial silicon that are affordable and designed to support SDN, said Lodato.
Lodato compares the SDN movement to the Unix movement. "Customers are revolting against proprietary architectures," he said.
Traditional hardware vendors regularly end-of-life products simply because they know that 80% of the market will invest in the next iteration, but customers are growing weary of that approach, he adds. "For companies like us, this becomes an opportunity," says Lodato.
In the short term, NHR will focus on Layer 1 with transceivers, as well as an expanded line of cables and maybe racks. NHR will also expand its support services portfolio and begin to formalize what it now calls its "invisible channel." NHR now works with value-added resellers that sell for traditional vendors but supplement with NHR's pre-owned equipment.
When SDN becomes a reality in the typical enterprise, NHR will consider spreading its wings.
This was first published in October 2012