Standard Terms and Definitions for the Technology Industry

The following definitions are a guideline to simplify, clarify and provide semantic consistency used throughout the secondary market for technology products and services.  These definitions are intended for use by anyone engaged in the marketing of technology products and services including, but not limited to, buying, selling, leasing, maintaining, financing and manufacturing such products and services. 

As Shipped by Manufacturer  - means the specific configuration of a particular system as sold and shipped by the OEM.

As is Tested/As is Working - one step up from "As is" condition, but is tested.

As Is - means equipment that is bought or sold with no express or implied warranties.  The buyer must rely upon its own inspection with no reliance upon conditions what-so-ever.  The equipment package and product group items may or may not be complete.  Buy at your own risk.

Authorized Reseller/Business Partner - Independent company authorized by the O.E.M to resell new products with warranty and services. These companies will normally carry the OEM's logo on their stationary and business cards.

Depot Repair Facility - means a repair facility to which equipment is shipped "out of house" for repair and return.  The user or on site maintenance personnel may perform the shipping to the Depot Repair Facility.

Factory Refurbished - means equipment that has been returned to the OEM's factory to be rebuilt to include new or repainted covers, repaired or replaced parts or subassemblies and upgrades to include new boards, chips and features.  May or may not come with factory warranty.

Gray Market - means New Equipment sold into the secondary market outside of normal OEM distribution channels and usually in the following manner:

1.                  An Authorized Reseller/Business Partner selling New Equipment in violation of its OEM contract in order to meet quota; or

2.                  An OEM "dumping" New Equipment in the marketplace in order to meet periodic financial targets.

The term "Gray Market" is frequently applied by OEM's in error to describe Used Equipment.  Regardless of its origins, Gray Market equipment is legitimate in every respect.  As is the case with Used Equipment, the customer is still responsible for securing a valid license to any OEM software which may have been installed and left on the Gray Market equipment when it is acquired.  Gray Market equipment is properly referred to as Unused Equipment. 

New Equipment - means a product sold new in the box exclusively by an OEM directly or through its authorized distribution channel.  New products generally come bundled with the OEM OS and new product warranty.

O.E.M. - Original Equipment Manufacturer - i.e. IBM, Avaya, Nortel, H/P, Sun Microsystems, Cisco, STK and EMC, etc.

Operating System (OS) - means the lowest-level software which handles the interface to peripheral hardware, schedules tasks, allocates storage, and presents a default interface to the user when no application program is running.  The OS may be split into a kernel which is always present and various system programs which use facilities provided by the kernel to perform higher-level house-keeping tasks often acting as servers in a client-server relationship.  The OS is often times proprietary in which case it is only directly available from the OEM or its Authorized Reseller/Business Partner.  The OS is variously associated with a machine specific serial number and passes with the machine to subsequent end/users or is sold or licensed to a specific customer/end-user.

Right to Use Fee (RTU) - means a fixed sum paid to the owner of intellectual property or its designated distribution channel for a limited right to use consistent with the terms and conditions of an agreement generally referred to as a license.  An RTU may apply to operating systems, applications programs, etc

Used Equipment - means equipment which is not new.  Equipment which has been in service subsequent to first sale as New or Unused Equipment.  Used Equipment is typically sold with all product group items originally supplied by OEM.  Product group items may include special tools, cables and manuals, but will not include any portion of the OEM warranty and will not include OEM software, the software license or the corresponding RTU.  Used Equipment is variously sold as follows: (i) "as is;" (ii) "eligible" for OEM standard maintenance agreement; or (iii) with a warranty provided by a Used Equipment Broker/Dealer. 

Unused Equipment - means New Equipment sold outside of the OEM's authorized distribution channels.  Unused Equipment does not carry an OEM New Equipment warranty.  OEM proprietary software should be removed from Unused Equipment prior to sale.  In the event Unused Equipment arrives pre-loaded with OEM proprietary software it is the Buyer's obligation to pay the OEM license fee to secure a valid right-to-use.  The presence of such software does not imply a right of the Broker/Dealer to sell and deliver a valid license.  If a customer buys Used Equipment from a source other than the OEM or OEM authorized reseller, the customer is responsible for making sure that the Used Equipment has a valid license and the correct software.  Unused Equipment is frequently improperly referred to as "Gray Market" equipment.

Used Equipment Broker/Dealer(s) - means an independent company not affiliated with an OEM.  Used Equipment Broker/Dealers may specialize in the purchase and sale of one or more OEM product lines and may offer maintenance service and support.  Used Equipment Broker/Dealers are to be distinguished from Authorized Resellers/Business Partners who are affiliated with OEM's and who may be granted certain rights to sell or distribute New Equipment and sell OEM software and licenses.

The NATD does not support or endorse the sale of "Gray Market" equipment with the OEM proprietary software/OS installed.