The hidden world of cheap HP hardware

Today we would like to present you a parallel world to the classic hardware trade. We will show you how it is possible that a server hoster or cloud provider can offer a dedicated server for less than 30 Euro per month and still work profitably. How even a small SME can build a full-grown IT infrastructure from Hewlett Packard (HP) with a very small budget. We will show you how you can save costs when purchasing servers and storage hardware and how you can significantly increase your chances on the market. As a manufacturer we will look at HP in this article. So we can work with concrete examples.

There are also brokers in hardware trading. Broker does not mean more than broker or dealer. However, hardware brokers differ significantly from the usual traders, where many companies buy their HP servers. HP has a partner structure in the regular market. This means that anyone who wants to buy HP hardware must go to a certified HP partner and buy the servers or the storage there. HP determines the end customer price per end customer and market. The purchase conditions are largely defined by the sales volume and the country where the hardware is installed. The HP partner then receives a discount based on his partner status and can either pass this discount on to the customer or keep it to himself. This is the only room for negotiation for the end customer. For larger orders there is also the possibility of a “price escalation”. Here the customer has the chance to renegotiate the price.

Another way to get your hands on HP hardware is through hardware distribution. Distributors are companies selected by the manufacturer to sell HP servers or storage to other resellers, but not to end users. This means that if you, as an end customer, want to buy a ProLiant DL380, you can go to your IT service provider and they can buy it from a distributor and resell it to you with very small surcharges. In terms of price, it makes little difference to most end customers whether you buy small orders from an HP partner or buy from your own IT service provider with a distributor.

Brokers are usually not HP partners, but manufacturer independent dealers. They buy entire inventories from a variety of sources, including end customers, partners, distributors, and other dealers. But it’s not uncommon for a broker to buy the rest of the manufacturer’s inventory when they bring a new generation to market. For example, in the transition of the ProLiant series from Generation 8 to Generation 9.

The big difference between normal sellers and brokers is that you can buy different quality. In principle, there are the following categories.

• New Hardware
• Renew Hardware
• Refurbished Hardware
• Used Hardware

When the HP ProLiant DL380 G8 came onto the market, many HP partners stocked enough servers to cover the rush of orders as quickly as possible. Some of them succeeded very well and quickly brought their investment back to the market. Others were not able to sell their hardware for various reasons. This is exactly where brokers come into play. All dealers, distributors and partners who have surplus goods in stock have to make a decision at some point. Should they take the risk to keep their stocks even further in order to sell them to end customers at good conditions, or do they want to transfer the goods to a broker at a significantly lower price than the total item. In this way they can free up their capital and generate their cash flow.

Another advantage of this wholesale trade is that brokers benefit from the price differences in the respective countries. For example, they get completely different manufacturers purchase prices in Germany than in Austria. However, this is also a frequent point of criticism. HP often refuses to take the maintenance for a device purchased in Germany under maintenance in Austria. But you can easily solve this problem. You switch to Third Party Maintenance (TPM).

A TPM is a manufacturer-independent maintenance company that covers maintenance throughout Europe with its own resources. Third-party maintenance companies have their own highly qualified technicians, their own warehouse and with their own logistics that ensure fast delivery of spare parts in the event of a malfunction. Hardwarewartung.com is an example of an international TPM that can even boast specializations for HP ProLiant servers. In addition, you can also save up to 50% on maintenance costs at Hardwarewartung.com through specialization.

Once the brokers have bought up the entire stock, they reduce the batches and offer them to end customers and partners at more favourable conditions. Even with new hardware, this can result in a price difference of up to 15 percent on the market price.

Renew Hardware are devices that have been shipped and possibly unpacked, but not turned on. This is for example exhibition goods at trade fairs or wrong deliveries, which may no longer be sold as new goods. Renew hardware has all the advantages of new hardware, but is traded up to 20 percent cheaper.

Refurbished hardware is used hardware that has been remanufactured and, in the case of HP, is covered by a new warranty. Refurbished hardware has had a rather negative reputation in the past. Refurbished servers were said to fail more often, or have more failures. Until a few years ago this was also the case in some cases. Non-certified reprocessing companies have refurbished used hardware with low quality standards and sold it as refurbished. Today this is a rarity. Especially HP has introduced a remanufacturing certification where all quality criteria of HP have to be fulfilled to sell the hardware as refurbished. When you buy from a professional broker, you get certified refurbished hardware that meets all of the manufacturer’s quality criteria. One such broker is Remark IT, headquartered in the Netherlands. Remark IT offers certified HP servers and HP storage at excellent prices throughout Europe.

Hewlett Packard also offers full manufacturer maintenance for refurbished servers and storage. However, the maintenance costs increase after the first year, when the devices out of warranty run very high. So you can’t take advantage of the cheap 3-5 year maintenance offers. To solve this problem it is recommended to use a TPM again. With the HP maintenance of Hardwarewartung.com you compensate this disadvantage and you lower the costs even further. All with full service quality.