Wednesday, 26 September 2012

The six myths of IT end-of-life decisions – ‘it’s best to recycle’ and other stories

In my discussion with Jim O’Grady, Director of Asset Management, HP Financial Services (see my blog last week) he pointed out that there are a number of myths about what can and should be done with IT equipment at end of life. The Technology Renewal Centre the company recently opened in Scotland bears out his comments.

Below are the first three of those myths, which are particularly relevant to the corporate environment:

image1. Recycling is the most environmentally friendly option for disposing of IT equipment.

Hopefully there aren’t too many people that still believe this. Recycling is the third choice in the end-of-life hierarchy, after Reduce and Reuse.

E-waste is a growing concern among the environmental and business community, driving many to look at processes that optimise the practice of recycling. The problem is that used IT equipment is often seen as having only this salvage value, rather than any worth as an asset in its own right. So equipment is given to local recyclers and the value is lost.

Recycling is a last resort. It allows materials to be recovered, but the process also comes with the responsibility for proper disposal. Companies need to take care that materials are handled in a safe and environmentally sound way, in accordance with a wide range of legislation around the world. Supplying equipment to IT companies and other organisations to refurbish for reuse is both a better end of life outcome and means there is no responsibility around disposal.

2. No one wants your old IT equipment.

As I mentioned last week, the market for used IT equipment globally is in the multi-billion dollar range and the fact that HP has opened the new Technology Renewal Centre is a testament to its health.

Many companies are locked into hardware supply contracts with IT suppliers and their main concern is that the equipment is fully supported by the manufacturer through warranties and service agreements. Sometimes, though, they have budget constraints and want to supplement equipment with something lower cost and/or avoid a wholesale upgrade in order to expand their IT capabilities. That’s when they need ‘old’ equipment, which, after a manufacturer’s refurbishment, still comes with a warranty.

3. Reusing or recycling old IT equipment is a difficult and time-consuming process.

It can be. Lots of companies think they’ve found a great way of putting used equipment back into the market by selling it, sometimes through auction sites like eBay. The problem is that they then have the responsibility of removing data, testing the equipment to make sure its fit for use, delivering it, etc. If equipment is to be sold, there needs to be a consistent approach across the company and it needs to adhere to local compliance legislation.

But it doesn’t have to be that way. Returning equipment to the manufacturer, who then puts in the refurbishing and recycling effort and takes the responsibility, is much easier. When it comes to selling on, HP, for example, uses its own field-based sales force to sell the refurbished equipment. Revenue, after costs, is shared with the previous owner.

I’ll complete the list tomorrow.

© The Green IT Review


  1. Hi Pete, good article.

    You're right sometimes it is easier to just ask the manufacturer to take back the equipment for a profit split but the problem with that is the manufacturer doesnt always offer the best solution partly because of the quantites that need to be resold by them to make a profit and partly becuase its a significant cost to them to collect a few desktops and a couple of servers. Selling to a company like us which doesnt have the same over heads can be a better fit as we use the same processes as the manufacturer in the first place. Also, as we try and resell into the end user market rather than a broker market the re-sale value can be higher meaning a better profit split. The negative is that we could take a couple of weeks longer to sell the equipment depending on what is moving in the market at the time, for example, some servers are moving faster than others and Disks are having a bit of a slowdown while people review the latest offerings that manufacturers have avaialable.

    Recycling as you say is the last resort. We conciously made the decision to make sure that we could recycle the units completely by selling different parts to different certified specialist recyclers rather than piling pallets of systems and selling to anyone who made the highest offer. Splitting your units down to componant level and selling to specialist and keeping some parts in stock for maitenance contracts (such as system boards and PSUs) is a good way to reduce landfil and help the environment.

  2. Sounds like Mr.O'Grady hasn't heard about upcycling. Resale is a good initial option, however, some products cannot be resold and must be recycled. There is at least one organization, called ERS International, that can turn ewaste into viable new products such as Recycled Plastic Lumber, and Recycled Stone.