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Cisco and Dell are up for a tough ride as they wont just have to compete against the likes of HP but also against a growing second hand market of their own products, according to a Bloomberg report. The Lquidated technology market is expected to account for 14% of technology sales next year up from 8% this year.

Hundreds of servers, personal computers and routers — some shrink-wrapped, some on pallets, some tossed in a cardboard box to be made into scrap metal — fill the 11,000-square-foot warehouse of Liquid Technology Inc, a company that buys liquidated technology and sells it for pennies on the dollar.

“There’s a lot of bad news driving the business,” said Richard Greene, Liquid Technology’s vice president of operations. “It’s the first wave of the tidal wave.”

The wave may sweep away sales of new systems from companies like Cisco Systems Inc. and Dell Inc., which are already suffering amid the recession and increasingly competing with sellers of their own used products.

The so-called gray market — supplied by equipment from failed businesses and shuttered offices — could account for 14 percent of technology sales next year, up from 8 percent, said Zeus Kerravala, an analyst at the Yankee Group. The $25 billion market for servers and networking devices may be among the hardest hit, he said.