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Network Hardware Resale eyes Tokyo, China for expansion

Zafar Anjum | March 25, 2013
Is opening an office in Tokyo in a month or two, says the company’s CEO Mike Sheldon.

NHR mainly deals in pre-owned Cisco equipment but in China, it is Huawei that dominates the market. "Is there a used Huawei business in China?" he said. "Maybe."

From Wall Street to creating a new business

Mike Sheldon went to MIT to study philosophy and game theory but ultimately went to Wall Street to become a broker, he told MIS Asia.

He ended his career on Wall Street in 2000 running emerging market trading for UBS in New York. Therefore, he was very familiar with Asian and Latin American emerging market countries.

In 2001, he joined NHR which was started by his father, Chuck Sheldon, a former IBM Sales executive and Mayor of Hermosa Beach, California, and his brother, John Sheldon. They both left the company many years ago.

Network Hardware Resale (NHR) originally began business in 1986 focusing on the re-marketing of midrange IBM computers. Sensing a trend in network equipment needs in the early 1990's, Chuck and his son John successfully reoriented the business to focus exclusively on pre-owned, used and refurbished networking equipment - primarily Cisco.

"We were very small then," he said. "US$20 million. We were a trading business which was exactly what I had done on Wall Street. Instead of illiquid bonds and foreign currency, and derivatives, it is illiquid technology products."  

"At that time, in 2001, was a very interesting time in technology. Everything was just cratering after a huge run up. So there was equipment everywhere. It was equipment on auction, almost on the street corner. The trick was buying smart, figuring out what people wanted because there was so much for sale. Some of that was good, some of that was not. And then finding the customer. That was the real secret. There was a lot of supply. Problem was finding the buyer."

He spent the next five years transforming the brokerage business into a customer facing, almost service organization. "We focused on quality, on testing, warranty and packaging. We have almost bespoke packaging-form-fitted and custom-made."

"At this point now, 12 years on, we provide lifetime warranty, and free technical support. We have equipment in Singapore and Amsterdam and US so we can deliver very quickly almost anywhere. We have a full suite of maintenance products which is the fastest growing area of our business."

"Cisco world has been the core of our business but we are diversifying now. In this world, maintenance is ubiquitous and everyone buys it. Compared to Cisco, our maintenance is 65-70 percent less expensive and actually declines in price as the equipment depreciates."

"We now have well over 200 depots for stocking equipments all over the world, more than a 100 in Asia. So we can deliver equipment in 4 hours with a maintenance contract in every major country in Asia. We have people who speak 30 languages. Our customer satisfaction is extremely high, much better than with Cisco themselves in almost all cases. We will do well over US$250 million this year worldwide. US$50 plus we expect in Asia Pacific alone after growing more than 50 percent last year and breaking the $40 million mark."

 

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