The current trends in the IT world are also creating new growth opportunities for refurbishers and their partners. Marco Kuhn, sales manager at bb-net, cites the use of used hardware in the booming Workplace-as-a-Service sector as a good example.
CRN: Mr. Kuhn, how did bb-net cope with 2018?
Marco Kuhn: In view of the fact that we recently moved into our technology center and that the comprehensive project was one of the largest of its kind for us and still generated ten percent growth, we could be satisfied. But we cannot rest on that as we will also face further challenges in the coming year.
CRN: What challenges do you mean by that and what do you hope for 2019?
Kuhn: Hope is the merchant's death; We are planning a year of consolidation in which we will have to concentrate on setting the course for the future. After eight years of continuous double-digit growth, you can and should treat yourself to that. One of the main tasks will be to consolidate the company's foundation in order to become even more efficient and to offer new products and services with a finger on the pulse of the market. In addition to the possibilities offered by the new building, we will also achieve this through additional personnel structures throughout the company.
CRN: How did the move to the new "holy halls" go and why was it necessary?
Kuhn: The move went largely according to plan and was necessary for that reason alone to create the framework for further growth. We looked for an alternative location to buy or rent for a long time in advance, but there was nothing suitable in the region. Hence the decision to build from scratch. With the option area of the same size next to the building, we are also well prepared for possible future extensions.
Good partner relationships as the basis of success
CRN: What are the advantages of the new location for your company, the partners and their customers?
Kuhn: We no longer have the distribution of work processes in three halls, but everything under one roof. At the end of the day we didn't have a pompous building, but a representative and above all efficient location. This sets standards in the industry and we can proudly say that we have further cemented our position as one of the top refurbishers in the market.
This also reflects the quality of our work. The advantages are obvious: better processes, the result is better quality, as well as securing and increasing workforce. A modern workplace environment creates the foundation for additional growth, leaps and bounds or quantities of output in order to be able to meet the ever-increasing demand.
Also and especially in the project environment we have laid the building block through our holistic security concept in order to be able to carry out projects with the highest requirements. Especially with regard to data protection, GDPR and Co., we are one of the most modern and safest refurbishers in Germany.
Business partners and interested project partners can convince themselves of this on site.
CRN: How important are the business with specialist retail and system house partners as well as the cooperation with distribution and cooperation?
Kuhn: The cooperation is existential and the cornerstone of our success. It is not without reason that we are listed as a supplier and partner in every renowned system house and specialist trade association. Distribution is also an important component, since, in addition to normal sales, strategic partnerships for the further expansion of the business model are also made here.
Between the CPU supply crisis and the wave of Windows migrations
CRN: How are volatile flash prices, Intel's supply crisis, and Windows 7 to Windows 10 migration plans affecting the used hardware business in companies?
Kuhn: With regard to the flash prices, we only have a limited impact on our business area, as we regularly secure contingents for 3-6 months at very good conditions and have them built for ourselves by the manufacturer in order to achieve a firm plan. Nevertheless, there is a risk that prices will continue to fall. After recently struggling with very sharp increases in prices and still coping with this well, we do not see any difficulties here.
The Intel supply crisis in combination with the high demand for new systems due to the approaching end of support for Windows 7 could mean that migrations from new systems have to be postponed. This could in turn lead to a shortage of buyback projects in the short term. As far as the supply of devices in the new goods area is guaranteed, the upcoming wave of migration is likely to result in a significantly increasing range of goods. We'll see what the year brings, it remains exciting.
CRN: The growing market has brought some new competitors onto the scene, and in some cases even manufacturers, distributors and large system houses are getting into remarketing. Do you feel an increased pressure here?
Kuhn: Manufacturer programs for taking back hardware have been around for years with the top players, but I don't see them as competition because the market is big enough. On the contrary, it makes an important contribution to educating consumers, which in turn sensitizes even more people to the topic of sustainable refurbishment.
Distributors don't refurbish themselves, they see refurbishers as a manufacturer. This creates interesting and lucrative business models and partnerships. We welcome the fact that the distribution has recognized the trend here and is focusing on this area. The requirements here are very high, so that access is only granted to a few established refurbishers.
And last but not least, the large system houses are also already on board as partners. All in all, it is a sensible creation of synergy effects, the potential of which we are far from exhausted. Here too, most of the companies are not refurbishers themselves, but work with partners such as bb-net, who have expertise in evaluating old hardware.
Mini PCs are also in demand when used
CRN: With which USPs do you want to and can you score points and set yourself apart?
Kuhn: We see our most important USPs in the areas of quality, delivery capacity and availability. In the project area, our competence in rollbacks with regard to logistics and processes as well as an attractive evaluation of the old hardware is an important factor for our system house partners. In addition, tecXL is not a flat brand name, but rather an entire program with a large partner landscape.
Last but not the least - Absolutely lean processes from incoming goods to outgoing goods, as we rely exclusively on software developed in-house that fits perfectly like a tailor-made suit. That is a massive competitive advantage.
CRN: Which devices are particularly in demand in the B2B business? Do servers, storage and co. Also play a role worth mentioning here? Do you expect that newer form factors such as mini PCs and curved monitors will soon become interesting for remarketing?
Kuhn: Server and storage play a subordinate role for us: not that there is no market for them, but we see ourselves clearly in the client business in the retail sector, according to the saying: "Cobbler stick to your last."
We already marketed Mini PCs very successfully in 2018 and the quantities we receive are continuously increasing. Curved monitors are not yet represented to a large extent among returns, but they are a typical device change to which we react as in recent years and, for example, develop our own packaging solutions in advance.
CRN: Are there areas in which used IT and a corresponding lifecycle asset management are particularly attractive, such as the regulatory environment and educational institutions? How can you support specialist dealers and system houses in identifying and addressing these customers?
Kuhn: In principle, professional lifecycle asset management is always necessary. If the part of marketing, data deletion, logistics, reporting is not yet available in the process, our purchasing department can analyze this together with the partner and their customers and incorporate them into the customer's processes. This makes the process smooth and both the system house and the customer ultimately benefit from it. We are thus creating a »subscription model« with a win-win situation that enables customers to always be up-to-date in IT without large investments.
Used hardware as a service
CRN: From your point of view, have most system houses now recognized the added value of remarketing with rollback and recapitalization for themselves and their customers?
Kuhn: Not yet to the extent that it should be, but we're working on it. Already now there are constellations that we are involved in the process from the beginning, which are running very successfully, as we can achieve significantly higher residual values here due to our high price competence and lean and established processes than the classic calculation. In addition, we can make data deletion much more secure and cheaper than the commercial end user or their IT service provider can do.
CRN: Are new business models for such as workplace or hardware-as-a-service more of a competition for you, or can you and your partners benefit from your rental offer and get new goods from leasing contracts or also reach new customers?
Kuhn: In any case, we benefit from it, the child just has a different name here and the repatriation must also take place here. This is exactly where our process of the second life cycle starts. We can already record the first successful partnerships here and options to bring refurbished devices into circulation as HaaS are under discussion. And between us - many have already recognized the train, but in the WaaS they did not consider the part of the return - whether for short-term or long-term rentals - or find it very difficult to create their own processes for it. We already have the plans in the drawer. Every WaaS provider is cordially invited to join us at the table so that we can combine the two successful models.
CRN: How do you rate the end of CEBIT for your company and Germany as an IT location?
Kuhn: What a shame, it was simply the meeting point for the channel for decades. However, it was not only since last year that it became apparent that the necessary change was not implemented in time. But there are now many other special channel get-togethers and events that are also ideally suited for expanding and maintaining the network.