The fastest growing sector in networking technology might surprise you.

Today, I sat down with Mike Syiek, Founder of NetworkTigers – one of the more original technology leaders – to discuss networking hardware.

Mike Syiek, Founder of NetworkTigers

I understand the importance of a strong network and having to stay connected globally. That said, upgrading to new speeds was difficult this last year. Why?

It really boils down to supply chain, which ultimately affects price and availability. New equipment is hard to get, and prices are sky high. Which, for us, has been a blessing. Today’s economy for networking equipment is a little like the auto industry – secondary and refurbished equipment is totally in demand. New equipment, out of the box, are incredibly hard to come by and are sold at a premium. That’s debilitating for any business that needs to run effectively. Now. 

This is not an industry sector I would have expected to be hot.

It continues to surprise me even after 20 years. Unless you’re in IT, or really dedicated to your network, the important details behind what powers automation, lifestyle, and security are overlooked. But when something goes down, you learn quickly.

Businesses are having a tough time getting new, unopened equipment from the manufacturers (OEMs). That’s when we come in. We have resourced network equipment from around the globe and carefully refurbish the hardware we remarket. This allows our clients to stay up to date with guaranteed quality equipment without having to wait or pay massively inflated prices.

So, while we’ve been here for a while, the global supply chain has made us critical to businesses – like casinos, hospitals, schools, you name it. This is a smart- buying, refurbished market which has grown close to 40% in the last 2 years.

To be fair, the market for both new and used network equipment is growing exponentially. From 2020 to 2026, the Global Networking Equipment market is expected to have a 7.85% compound annual growth rate (CAGR), moving from an industry valued at 9.83 billion USD to one valued at around 15.48 billion. 

What other factors are driving this?

It’s our work-from-home culture, infrastructure, wireless, and frankly the wellness of any business that’s driving this demand. Not to mention the Asia-Pacific market, increased threats to cyber security, and the need to modernize internal corporate networks. (I’ve outlined the top drivers below.)

I can’t imagine that the manufacturers/OEMs like this.

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Look at it this way. Working equipment at 1/10th of the cost of new makes the equipment that much more attractive. Depreciation on used network equipment is much less than buying new equipment which loses over half its value once taken out of the box. 

And that’s why this long-undervalued market is suddenly relevant. Beyond the allure of price, seller refurbished suppliers have all the supply today and can siphon more attention away from the OEM’s. Yes, price and demand will continue to rise commensurately with supply chain, but companies will have a hard time returning to how things were. 

And here’s what’s interesting if you’re in networking. OEM’s haven’t quite figured out how to embrace the secondary market with licensing opportunities. We believe that with improved device tracking and lineage, the OEM’s and the secondary market will become partners, not competitors.

So, rather than being in the crosshairs, our relevance is driving participation. We’re excited about the future.

Thank you, Mike! I’ve outlined the top factors that are driving the networking world. Great to hear there’s a silver lining out there which may make my next upgrade less painful. 

1. Internet infrastructure is improving – worldwide. Higher speed access to the Internet will be available over the coming years from both local improvement projects and the 2021 Infrastructure Bill. This government initiative earmarks $550 billion in federal funds for improving America’s infrastructure, with a $65 billion investment in improving broadband access. For example, in the UK, Parliament is pushing for 85% of the UK to be gigabit broadband by 2025. This will increase demand for network products worldwide in a world already constrained by supply chain disruptions
2. Internet download speeds are increasing. Internet download speeds will likely go from 15-100MB per second to 1 Gigabit in city centers or near communication nexus/hubs, this speed is likely to much more.  Current company, hospitals, and government networks built for lower speed internet access will become the choke point with the increased demand to use the faster speed. Upgrading internal network infrastructure will not only be demanded, but companies will be requiring it to remain competitive.
3. Upgrading, especially investing in all-new equipment, will not be possible. Current wait times for new network equipment is between four and ten months. After waiting for the new equipment to arrive, you will have to pay five to twenty times as much as used equipment that is available the next day. Reliable seller refurbished equipment is “the here and the now” and in the realm of “the possible and the why not“. The coming market demand squeeze will only be exacerbated by the supply chain issues. 
4. Investing in all-new equipment is likely an environmental and ethical concern. Refurbished gear sidesteps the looming question of e-waste, a major question for both businesses and their consumers. Two-thirds of North Americans surveyed said that they prefer brands they see as eco-conscious. While IT has a great capacity to streamline data processing and lessen waste, creating, shipping, and installing all-new equipment regularly is now a major environmental problem. 
5. Fundamental changes in the way the world works during the pandemic has forever placed an increased demand on corporate network infrastructure. Remoting employees, guaranteeing secure and powerful access, improving WiFi, and keeping speed high has put many of us in the tech world on permanent twelve-hour work days. This, complicated by the supply chain issues, has made the price of highly demanded equipment skyrocket. Purchasing new equipment to replace aged or outdated network equipment can be prohibitive in a time of chip shortage and upheaval.