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Categories: DELL

Sysadmin blog What’s the difference between a refurbished server and a new one? The term refurbished has a negative connotation, conjuring images of open box returns and non-existent warranties, but in at least one case – #Dell ‘s ecosystem – that narrative doesn’t quite fit. @xByte Technologies is a company of about 50 people based out of Florida, just south of Tampa. The company has revenues of more than $20m per year, with 20 per cent growth year over year for the past five years. And their business is selling servers officially classified as refurbished. If $20m seems like a lot for a company selling cut-price refurbished gear, it’s a bit more complicated than all that. xByte exists because of a quirk of Dell’s business model that makes sense once it’s all explained. It’s worth noting that Dell doesn’t build servers and then just keep endless warehouses full of gear waiting for customers to buy. Dell actually uses a just-in-time delivery model that basically means servers are assembled as they are ordered. This has a few advantages for Dell. The first is that it allows for a great deal of server customization without having to keep stock on every conceivable variation of every model. The second is that it lets Dell push at least some of the burden of keeping inventory around onto the component suppliers. Dell buys as it needs and builds as it needs. For the most part, this works for everyone involved. There is, however, a tiny niggle of a problem. For Dell’s just-in-time delivery system to work, if someone cancels an order, they still build that server. It’s actually less expensive to continue building the server and selling it as a “refurb” than to try to stop their production chain at that point.

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