There are only a few successful refurbishers like WorkVentures, and their combined volume is falling far short of the entry of new systems into the market. WorkVentures, for example, isn't even selling enough systems to clear out its annual intake from Westpac. With more than 2.5 million new computers now sold in Australia every year, the recycling industry faces difficulties in keeping up with companies' need to dispose of old equipment into a market where there's only so much demand for old equipment.
End-of-life disposal is becoming increasingly important for technology consumers as equipment's useful life continues to shrink. With industry indicators suggesting we are in the midst of an IT investment upswing, new projects will hasten the retirement of millions of telephone handsets, network NICs, network hubs and switches, desktop and notebook PCs, projectors, servers, outdated network cabling, and the myriad other bits and pieces that make up a modern IT infrastructure.
By next year, Gartner has predicted, IT spending in the typical North American business will account for 10 percent of all capital spending, increasing from 7.5 percent this year and rising to 50 percent of the enterprise capital budget by 2010. In Europe, the figure will sit at 7.5 percent in 2005.
That means a lot more equipment will be making its way into the average business -- especially things that have been generally considered immune to obsolescence, such as telephones. The rise of Voice over IP (VoIP) will change all that, however: thousands of decade-old telephone handsets and PABXs now face the scrap heap, and steadily growing populations of desktops and servers must all be dealt with.
| "It's one thing to put it in a bin and say it's someone else's problem -- which has tended to be the attitude -- but people aren't aware of alternatives." |
"Typically, companies have pretty good purchasing strategies but don't give a lot of thought to disposal. It's one thing to put it in a bin and say it's someone else's problem -- which has tended to be the attitude -- but people aren't aware of alternatives. Companies need to start thinking about having a disposal strategy."
A rising tide of discontent is forcing vendors to become more proactive in helping customers manage their equipment through to its end-of-life: this month, new European Union legislation will require manufacturers to take back electronic equipment at their own expense -- and do something with it other than dumping it in a landfill or exporting it to another less environmentally conscious country.
Here, such requirements remain a distant vision. Some vendors may be willing to help you handle your old equipment, if only to generate additional consulting revenues. And while donating old equipment may seem a logical choice, warm feelings quickly front up to the reality of technological obsolescence: while a school might appreciate the gesture of donating your old 10Mbps Ethernet hubs and Token Ring network adaptors, that equipment won't have much value in today's switched 100Mbps networks.
Many companies avoid the issue altogether by leasing their equipment, which must be handed back to the lessor after the lease has run its course. That lessor, in turn, will eventually auction the surplus gear through a third-party auction house in an effort to extract whatever residual value it can get from the equipment. From there, equipment often ends up in the hands of computer refurbishers and, eventually, smelters. But with hundreds of systems typically on offer at such auctions, those residual values can be humble to say the least.
For companies that have bought their gear outright, it may be better to manage the auctions internally. Selling your gear through eBay is a quick and dirty solution, and one that was particularly popular in 2001 as administrators of imploding dotcom companies tried to salvage value from anything that could be plugged in. Even then, however, lots of equipment may struggle to find new owners.
Just because you can't sell your old gear doesn't mean you have to dump it off a cliff in the dead of night, however: there are ways of retasking equipment within the business to extend shelf life many times.
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• The dark side of asset management
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