Not Just For Beanie Babies Anymore: Online Auction Sites a Boon for IT Purchasing

CIOs looking to save money on their technology purchases are hitting eBay in search of high-end products at lower price points.

I.T. executives are spending a lot more time on eBay these days, but they’re not looking for Laverne and Shirley lunch boxes. In today’s economic climate, CIOs looking to save money on their technology purchases are hitting the online auctioneer in search of high-end products at lower price points?and they’re finding them.

Etienne Handman, CTO for E-Loan, a Dublin, Calif.-based online lending company, says he recently scored a barely used $60,000 Sun E4500 server on eBay. His price?$20,000. Handman’s company has lowered its IT costs by 11 percent a year?in part by buying things through eBay?while revenue increased by 88 percent. "We’re typically paying 25 to 30 percent of the ’new’ price for essentially brand-new equipment," Handman says.

Chris Montgomery, director of IT operations for San Antonio-based consultancy Frost & Sullivan, first discovered the benefits of online bidding when his CFO suggested he scout eBay for deals on additional air-conditioning units for his server farm. "We purchased a 14,000 BTU floor unit at an exceptional discount," Montgomery recalls.

Since then, Montgomery’s department has bought a new Dell PowerVault 130T backup system on eBay. "We were able to acquire top-of-the-line equipment while replacing our legacy system at a cost savings of more than 75 percent," explains Montgomery, who is currently pricing Web servers on the auction site.

With more than 400,000 computer-related products for sale at any given point, eBay says IT executives are bidding on everything from routers to phone systems to LCD projectors. The company says more than 50 percent of the listings are actually new products and many others are still under warranty.

Before you join the bidding frenzy, take the advice of seasoned IT execs and eBay buyers: Look up the seller’s history and contact him directly with any questions, check out other closed auctions for the same type of item to find out what price it might go for, and research the purchase as you would any other IT expenditure.

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