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The Survivor's Guide to 2004: Business Strategy: Page 2 of 9

• Storage and Services

• Infrastructure

• Business Applications

• Special Report: That Was

  Now, This is Then

Todd Schoenfeld, IT director at Point Biomedical Corp., a developer of medical imaging equipment in San Carlos, Calif., recently bought a Compaq tape library from a bankrupt biotech firm at a liquidation auction. The item, which lists for $200,000, cost him a mere $6,000. With his venture capital-backed firm just now ramping up for its first product release after seven years in development, Schoenfeld is on the prowl for bargains to equip hundreds of new hires planned for 2004. He also keeps a close eye on eBay. When we spoke, he was looking for a Compaq G3 server that was no more than 2 years old.

Of course, used equipment comes with hidden expenses and pitfalls. For one thing, a three-month maintenance and support contract with Hewlett-Packard, which now owns Compaq, costs more than the equipment itself, Schoenfeld says. Before he bought the tape library, he checked with HP to make sure it would offer a service plan. "We didn't want to get a doorstop," he says.

Although IT vendors have been careful to devise programs that don't cannibalize their core businesses, soft demand has kept prices low on new equipment.