By Clyde Noel

When budgets are tight and high-tech corporations expand, they consider purchasing pre-owned network equipment to save capital. Having seen the recent tough economic times, corporations are conscious of how they spend their money — and when they need office equipment they contact Hula Networks.

Eighteen months ago, three enterprising friends launched Hula Networks in a 2,000-square-foot building in Mountain View. Recently they expanded into a 5,500-square-foot building because the business had grown so fast they needed more space.

Co-owners Joe Commendatore, Scott Hobin and Steve Robinson realized there was a lot of surplus networking and phone system equipment — both new and used — available as numerous companies downsized or went bankrupt. So each put in $100,000 of their own money and launched Hula Networks.

Commendatore and Hobin are Mountain View natives who attended Mountain View High School together. Robinson, a Boston native, moved to Silicon Valley because his wife was from San Francisco and wanted to return to the Bay Area.

“We sell Hula-certified pre-owned equipment and overcapacity of new equipment after we test it,” Commendatore said. “We do the entire IT (information technology) infrastructure.”

Hula Networks puts equipment through a 10-point testing and re-certification process. Most of the used and excess equipment they certify is from major manufacturers such as Avaya, Cisco Systems, Sun Microsystems and Juniper Networks.

“Forbes magazine predicted this business could be a $20 billion market, and today a considerable portion of our business is going international,” Robinson said. “Our business has been growing 300 percent a quarter.”

Lead time from original manufacturers is four to 10 weeks, but Hula Networks can deliver products the next day because of the large inventory. In many cases the equipment is brand new.

“We have a good reputation because of word of mouth. Each of us has network experience, and we know the products we are selling,” Robinson said. “Many products are 30 percent to 60 percent off retail prices.”

Hobin said Hula works both sides of the economy by buying equipment to give corporations working capital. “Corporations are conscious of cash flow, and we provide them with a flexible solution,” he said.

Frank Peltier, operations manager, said, “My job is to put some sanity to this rapid growth. Customers come to us because we deliver a quality product on time.”

The three co-owners conceived their company in Hawaii while on vacation and incorporated the Hawaiian theme into their business.

“We want to create a working environment where the workers can enjoy what they’re doing,” Commendatore said. “We carry the (Hawaiian) theme on our business cards and the stationery. Every day is Friday for the executives and the workers.”

They all agree their goal five years from now, is to be the predominant source for companies looking for network equipment.

“We are resourceful and creative and want to see the customer is happy,” Hobin said. “We will do cartwheels for the customer.”

For more information, visit Hula Networks at the ISPCON show Oct. 20-22 in San Jose, logon to www.hulanetworks.com or call (800) 559-0902.