An IT Director Goes Shopping

One way tanking dot-coms have of paying off their debts to investors is to sell assets through auction. And therein lies an opportunity for the savvy network administrator to pick up bargains.

MCP Magazine recently attended an auction to watch one such bargain-hunter in action. Brian Engelsen is the director of IT for Pagoo Inc., a company that specializes in voice-over-IP services. He attends many events run by DoveBid, which holds business auctions worldwide. In this particular auction, Engelsen hoped to pick up a Cisco switch or two.

At 8:30 a.m. on the day of the auction, Engelsen wandered through the offices of defunct Pandesic (a well-funded venture of Intel and SAP), evaluating the equipment for sale.

“The hard and fast rule I have for auctions is, I always know how much I’m willing to pay,” he said. “And I never violate the rule. I don’t care if it goes over by a dollar.”

Engelsen picked through boxes sitting in one office. “People should pay attention to the nooks and crannies... there might be little treasures hidden in the boxes.”

Pagoo runs a mix of Windows 2000, Windows NT, and Unix, “depending on the application,” Engelsen said. He comes to auctions to try to save money on equipment that’s been budgeted for already.

His research consists of getting a list of what’s being sold ahead of time and marking down what he wants. From there, he does research on what the equipment would sell for through the vendor’s resellers or eBay. He also arrives with a screwdriver, prepared to open machines to peer inside. His advice: “If it’s a desktop, it’s best to fire it up. Servers will more than likely work.”

By the time the auction began, the “factory floor” was jammed with people holding paper paddles showing their bid numbers. DoveBid also broadcasts many of its auctions through its Web site. If people are simply going to watch the action, they tune into the Webcast. If they’re going to bid, they also call by phone in order to manage their bids real-time.

Auctioneer John Rademaker expected several hundred people around the world to participate online. The company was selling about a thousand items and Rademaker said the auction would last about five hours.

“We’ll go fast. If we’re selling individual items, we’ll sell a hundred in an hour.” (The auction actually lasted about twice that long.)

In a situation where there are multiples of the same item, the auctioneer will announce “lot 100 through lot 129,” Rademaker explained. “There are 30 IBM 300PL 500s. They’re all pretty much the same. High bid can take as many as they want and whichever ones they want. The high bidder might take four or five. Then we say, ‘Who else wants one at that price?’ More of them go out. Then we say, ‘Ten left. Anybody else for individual quantities?’ Next, it’s bid times 10. You take them all.”

But the Webcast on this day created problems. When a participant bid on an item, he or she would click a button on the browser window; to cancel the bid, he or she would click another button. But there was a lag in the time it took for that event to be acknowledged by the auctioneer. For example, bidding on two Dell Latitude CXS PIII Slim notebook computers reached $2,400 apiece on the Web before the auction company noticed that its bidders had dropped out. At that point, Rademaker turned to those physically present and redid the bidding. The units finally sold for $925 each.

Six Compaq ProLiant 1600s with 512MB of RAM and 27GB hard disks sold for $1,100 apiece. Twenty-five Compaq disk arrays with between 24GB and 109GB went for $650 apiece; the high bidder chose which arrays he wanted from the bunch. Several dozen IBM ThinkPads sold for $650 apiece; when the bidding went into lot-sized quantities of eight, the price came down to $525 each. A Cisco Systems 7200 sold for $6,100; a 2600 series router for $1,900.

[To hear an audio file of auctioneer John Rademaker calling live and online bids, right-click this link and choose "Save As" from the pop-up menu. Or send e-mail to [email protected]; put "Auction" in the subject line of your message.—Ed.]

By the end of the day, bidder Engelsen had lost out on a Cisco 6509 switch, lot 547. He’d set his limit at $26,000, but the bidding surpassed that, finally landing at $32,000.

“The overall pricing has been a little on the high side,” he concluded. But he’s confident that he’ll get what he needs at the next auction. “You have to be patient.”

To see a list of upcoming auctions, visit

About the Author

Dian L. Schaffhauser is a freelance writer based in Northern California.


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