To prevent that, HPFS's Andover, Mass., office has 470,000 square feetof offices and storage space and labs and parts shops and loadingdocks that operate around the clock, taking in leased and repossessedequipment for a lavish technical wash and wax. Refurbishing used gearincludes wiping hard drives, replacing components, testing chips,restoring basic configurations and sucking the dust out of a system.At any given moment, HPFS has 50,000 used assets here. Half-a-millionpass through in a year. Skids hold yellowed, junky monitors that willsoon meet an environmentally conscious death. There are palletsstacked with notebooks like giant plates of nachos. In the back,45,000 square feet of warehoused gear is stacked to the ceiling,waiting to ship out to HP's services group, or to brokers, or to a CIOwho got herself a deal on a 20-year-old VAX system.

The Andover facility (it was Compaq's before the merger) didn't existsix years ago. IBM has built 20 refurb houses worldwide, taking in15,000 assets a week. These vendors are not in denial; they're takingthe brokers on.

In general, vendors can't beat brokers on price because their overheadis much higher. But vendors do have certain advantages. Trustedbrands. Deep knowledge of the systems. Extensive services groups tosupport the gear. Dealing with the vendor directly certainly providesthe least complicated license transfer and maintenance contracttransfer process. This is where the secondary market is going. "I'llpay a little more and deal directly with the vendor rather than pay alot less and go through a broker," says Brooks, Keystone Property'sCIO.

The vendors are as scientific about the secondary market as thebrokers are seat-of-the-pants. HP's warehouse is entirely automated.There are equations that determine the value of used gear - whether,say, it's more valuable in parts than as a whole. "We have tuned thedemand," says Af Assur, IBM's director of global remarketing forGlobal Asset Recovery Services, which is part of IBM Global Financing,the leasing group. "We know the inflow and outflow about two months inadvance, so we plan and know exactly what to do with the asset when itcomes in."

It has been a coldly corporate ramp-up, which is why Rothman thinksfewer people know about his business than they do Lynch's. "It's notas sexy a story as, you know, some broker-making-millions story,"Rothman says. "Look, 40 percent of our [division's] revenue is fromthe secondary market. That's a big number."