Save by using old hard- and software Blog 1. Buying IT second hand

Organisations confronted with less financial room might choose to save money on IT by using old or second hand hard- and software. It seems an obvious choice, like a second hand truck. There are however some additional software glitches to take into account.

In those parts of the economy where information is not the primary process, such as education, in health care, social security, NGOs and other organisations working on volunteers, licensing may be a rather large blockade to renewing the technology. That is also true for SOHOs¹ and SMEs², where maintenance is a matter for a knowledgeable employee, an acquaintance or a well-willing family member, and license costs are thus much higher than the service costs.

Refurbishing hardware

If you assume that typing on an old machine is just as fast as on a brand new one, you are right. A solution could be using old, used or even obsolete hard- and software.

One of the largest software companies has found a solution: 'Microsoft and the Secondary PC Market' (2008 Whitepaper_Secondary_PC_Ecosystem.pdf) or 'A Second Life for PC's; Empowering People in Need' (2008 second_pc.pdf by Microsoft Unlimited potential). The company describes why the refurbishing companies work for a good cause and helps them by providing marketing arguments why 'refurbished' IT components should be re-used, maybe after a small upgrade: “Microsoft believes that getting maximum use out of existing computers—through programs that support donation, refurbishment and resale of used PCs—is key to serving the goals of digital inclusion and environmental stewardship”. On 'refurbished' try to find Microsofts 'MAR Refurbished Licensing Guide' (mar_refurblicensingguide.pdf) or any newer version. MAR stands for a Microsoft Authorised Refurbisher.

In fact it is a type of green IT re-use, a subject I will get into in a later blog posting. But Microsoft erases misconceptions on second-hand and obsolete computers like these: 'A robust secondary PC market will hurt sales of new computer hardware and software', 'Secondary PCs are substandard goods' and 'The secondary PC market can't be trusted'. Mark that in the first quote Microsoft talks about software sales. And for the rest: selling second-hand hardware is OK.

For hardware this is rather simple: any unit is unique, so there can be only be one owner. Since there is one hardware owner, he/she will have to part with it when sold. Since most machines are, when new, sold including software (operating system and applications) this software will be included second hand as well. A new system will replace the old one and also include new software. Software does not suffer wear and tear and does not need to be refurbished, of course.

Refurbishing hardware including software

Not so in the software industry. That part of the software industry that is not based on service but on licensing software, feels the second hand re-use of their software threatens their market, even though the organisations involved will never pay for a full license. This leads to some rather bizarre methods to regain market share.

Microsoft writes (see link above) '... if the machine has been improperly refurbished or is running counterfeit software that lacks support and might be unsafe to run. Many organizations that donate PCs for reuse don't include the original software CDs and documentation needed for re-installation after the data is wiped from the machine, so the machines are effectively useless. Microsoft is helping to ensure that people in underserved communities can use these 'naked computers' by offering special pricing on Microsoft operating system and productivity software.' So, old or second-hand hardware is OK but only with new (Microsoft) software.

Mark! Software that does not cost the software company a penny – the users here will never choose for this brand if they have to pay full value. Besides, because the hardware is old the software often has be older versions as well. And the user, the license-taker, cannot do anything else with the solution. They're not even allowed to sell their old hardware!

Alternative solutions

Microsoft, like other large license sellers, has a strategy devoted: 'Secondary PCs also account for a significant portion of the computers used in education and community technology access programs that help young people and adults develop the skills necessary to participate in the information economy. In Canada, for example, the Microsoft-supported Computers for Schools partnership donates about 100,000 PCs a year to Canadian schools.' Young (Microsoft) taught, old (Microsoft) user? World-wide children educated never to know that there are other options or brands.

Other models to make people acquainted with the product are other so-called social models, carefully described in Microsoft’s 'A vision for affordable computing. Breaking through the affordability conundrum' (April 2008 WP_Affordable_%20Computing_ENG.pdf). Described business models include rent, internet cafe, multi-user use of single PCs, super-cheap software and others.

There are two major forces at work here: price and simplicity. Price: “believe me - I give you a major discount, so cheap you do not have to steal my software elsewhere”. An offer you cannot refuse. And on simplicity: “I provide you with an operating system, a browser, an office suite, email, graphics suite, multimedia and more”. Both claims are not Microsoft-only but nobody knows that...

Consumers should KNOW that there are other, cheaper and often better solutions. Both in the realm of free software and of open source software. That they can keep using their familiar Windows, even with other software. Refurbishers could start by providing a user-friendly Linux distribution with their old PCs. Hardware vendors could start by providing a user-friendly Linux distribution with their new PCs. Educators by making children acquainted with other software than the stuff they get at home and (later) office. Give them a choice.

In other words: any money put into software licenses might be a waste of money. And in a period of financial shortages, that counts.

I will get back on this issue in newer posts.

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1Small Office / Home Office – single workers and freelance employees.

2Small and Medium-sized Enterprise – companies with up to ~200 employees.