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The role of computer brokers
policy
The role of computerbrokers by PETER MORfiE
T
here is a large worldwide market for used computers, generally bought and sold through brokers. Brokers are people or companies who are involved in leasing, broking or trading generally in new and used computers, from minis to mainframes. Worldwide there are about 530 broker companies, with 300 in North America alone. Little trading is done between the USA and the rest of the world though, mainly because of the difference in power requirements.
How do brokers work? The major task of a broker is to convince potential clients that second user equipment is cheaper, can be delivered more quickly than brand Abstract: There is a growing potential for brokers of second user equipment, especially in the IBM and DEC fields. Used equipment is often cheaper and easier to get hold of than new equipment, while still being maintained by the original manufacturer. Brokers have their own international organizations, to interface with the manufacturers and to exchange information about equipment available and possible customers. The Computer Brokers Exchange is one of these organizations, based in The Netherlands and offering a network service to brokers. Keywords: data processing, second user equipment, leasing.
Peter MorCe is managing puter Brokers Exchange.
~0126 no 10
director
december 1984
of the Corn.
and can still be new equipment, guaranteed for maintenance by the original manufacturer. Machines can often be bought for prices 30-70% below the official list price, and delivery can be at short notice, or even from stock in some cases. On the maintenance side, the original manufacturer often gives the first owner of a computer a maintenance agreement qualification (MAQ) which will be accepted by offices of that manufacturer in other countries. A broker should know the current market value of a computer at any time. Having learnt that a system is available, the broker’s task is to match the available system with a potential owner. This is a lot easier if the broker belongs to an organization such as the Computer Broker Exchange, which is based in The Netherlands. Then the broker can offer just a CPU or a printer, for example, on the market letting a broker in another country find a buyer. On the buyer’s behalf, the broker should be able to: arrange for an engineering company to prepare the machine for transport, ensure that all the cables, manuals and so on are with the shipment, check the maintenance certificate from the original manufacturer while the receiving broker will check that the model is supported in that country, as this can be a problem, the particularly in Middle East, take care of any upgrades or downgrades required, organize import/export licenses, which are required even within the EEC and NATO. In an effort to make sure everything runs smoothly, the broker will often
001 l-684X/84/10001~02$03.00
0
1984 Butterworth
use a third party maintenance company such as Circle or SMS. They too can often supply parts from stock, considerably below list price. On the whole computers do last a long time, although the printers and disc or tape drives are usually the first to go. If equipment is beyond the help of a good maintenance policy, the last resort is to sell the item to a scrapping company. As the older models contain a high content of precious metal, brokers then become more concerned with price per cubic foot that value to a user.
Broker organizations It is important for brokers to maintain a good relationship with the original manufacturer if they are to give a good service to their customers. For IBM brokers there are actually two organizations which can be used to present a unified approach to the original manufacturer. In Europe this is the European Computer Leasing and Trading Association (ECLAT) and the North American equivalent is the Computer Dealers and Lessors Association (CDLA 1. Brokers often belong to a broker network, swapping information on available equipment and customer requirements. Such an organization is the Computer Brokers Exchange (CBE) which is the network information centre for most IBM equipment brokers outside North America. The network operates in a similar way to other commodity exchanges, but in this case the commodity is used IBM equipment. In the CBE participating companies send their list of requested and offered IBM machines by telex to the exchange, once a week. From this information the Exchange compiles a weekly telexed CBE Bulletin, which
& Co (Publishers)
I.td
13
gives all brokers in the network an idea of the current market. The available equipment forms a ‘pool’ of about 500 CPUs and peripherals within the network. Brokers can contact each other through a directory published by the CBE which lists about 286 brokerage companies in 24 countries. An online database for brokers will also be available shortly.
The future As IBM does not carry
14
out its own
trading in used equipment, and IBM users can only buy or lease from IBM, there is increasingly large market for IBM brokers, given the number of new machines which are being announced. In the end, it is quite likely that original manufacturers will have to look at trading their own used equipment, but until that time there will be room in the market for many more brokers. Unfortunately the business potential attracts people who are not really knowledgeable with the computer world, with unhappy re-
sults. Even a well-known and quite large company in the UK recently went into receivership, showing that even such a growing market can be precarious. l Having set up a strong IBM network, the CBE is now intending to set up a similar network for DEC brokers, and would be pleased to hear from possible members. q
Computer Brokers Exchange, PO Box 5378, 2000 GJ Haarlem, The Netherlands.
data processing
The role of computerbrokers by PETER MORfiE
T
here is a large worldwide market for used computers, generally bought and sold through brokers. Brokers are people or companies who are involved in leasing, broking or trading generally in new and used computers, from minis to mainframes. Worldwide there are about 530 broker companies, with 300 in North America alone. Little trading is done between the USA and the rest of the world though, mainly because of the difference in power requirements.
How do brokers work? The major task of a broker is to convince potential clients that second user equipment is cheaper, can be delivered more quickly than brand Abstract: There is a growing potential for brokers of second user equipment, especially in the IBM and DEC fields. Used equipment is often cheaper and easier to get hold of than new equipment, while still being maintained by the original manufacturer. Brokers have their own international organizations, to interface with the manufacturers and to exchange information about equipment available and possible customers. The Computer Brokers Exchange is one of these organizations, based in The Netherlands and offering a network service to brokers. Keywords: data processing, second user equipment, leasing.
Peter MorCe is managing puter Brokers Exchange.
~0126 no 10
director
december 1984
of the Corn.
and can still be new equipment, guaranteed for maintenance by the original manufacturer. Machines can often be bought for prices 30-70% below the official list price, and delivery can be at short notice, or even from stock in some cases. On the maintenance side, the original manufacturer often gives the first owner of a computer a maintenance agreement qualification (MAQ) which will be accepted by offices of that manufacturer in other countries. A broker should know the current market value of a computer at any time. Having learnt that a system is available, the broker’s task is to match the available system with a potential owner. This is a lot easier if the broker belongs to an organization such as the Computer Broker Exchange, which is based in The Netherlands. Then the broker can offer just a CPU or a printer, for example, on the market letting a broker in another country find a buyer. On the buyer’s behalf, the broker should be able to: arrange for an engineering company to prepare the machine for transport, ensure that all the cables, manuals and so on are with the shipment, check the maintenance certificate from the original manufacturer while the receiving broker will check that the model is supported in that country, as this can be a problem, the particularly in Middle East, take care of any upgrades or downgrades required, organize import/export licenses, which are required even within the EEC and NATO. In an effort to make sure everything runs smoothly, the broker will often
001 l-684X/84/10001~02$03.00
0
1984 Butterworth
use a third party maintenance company such as Circle or SMS. They too can often supply parts from stock, considerably below list price. On the whole computers do last a long time, although the printers and disc or tape drives are usually the first to go. If equipment is beyond the help of a good maintenance policy, the last resort is to sell the item to a scrapping company. As the older models contain a high content of precious metal, brokers then become more concerned with price per cubic foot that value to a user.
Broker organizations It is important for brokers to maintain a good relationship with the original manufacturer if they are to give a good service to their customers. For IBM brokers there are actually two organizations which can be used to present a unified approach to the original manufacturer. In Europe this is the European Computer Leasing and Trading Association (ECLAT) and the North American equivalent is the Computer Dealers and Lessors Association (CDLA 1. Brokers often belong to a broker network, swapping information on available equipment and customer requirements. Such an organization is the Computer Brokers Exchange (CBE) which is the network information centre for most IBM equipment brokers outside North America. The network operates in a similar way to other commodity exchanges, but in this case the commodity is used IBM equipment. In the CBE participating companies send their list of requested and offered IBM machines by telex to the exchange, once a week. From this information the Exchange compiles a weekly telexed CBE Bulletin, which
& Co (Publishers)
I.td
13
gives all brokers in the network an idea of the current market. The available equipment forms a ‘pool’ of about 500 CPUs and peripherals within the network. Brokers can contact each other through a directory published by the CBE which lists about 286 brokerage companies in 24 countries. An online database for brokers will also be available shortly.
The future As IBM does not carry
14
out its own
trading in used equipment, and IBM users can only buy or lease from IBM, there is increasingly large market for IBM brokers, given the number of new machines which are being announced. In the end, it is quite likely that original manufacturers will have to look at trading their own used equipment, but until that time there will be room in the market for many more brokers. Unfortunately the business potential attracts people who are not really knowledgeable with the computer world, with unhappy re-
sults. Even a well-known and quite large company in the UK recently went into receivership, showing that even such a growing market can be precarious. l Having set up a strong IBM network, the CBE is now intending to set up a similar network for DEC brokers, and would be pleased to hear from possible members. q
Computer Brokers Exchange, PO Box 5378, 2000 GJ Haarlem, The Netherlands.
data processing