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Cash for clunkers: Old tech equipment boosts the bottom line

Mary K. Pratt | June 14, 2011
Some firms are recouping cash as they send old PCs, servers and laptops out the door.

For large firms, "savings in the millions of dollars isn't that unusual. That's a common number once they have a mature program in place," says Barbara Rembiesa, president of the International Association of Information Technology Asset Managers (IAITAM). "It's a matter of understanding the value [of IT assets] and bringing the value back to the company."

Jahromi's work is a case in point.

He developed a policy whereby older equipment that's still functional and under warranty gets redeployed within GSK; gear that's out of warranty is resold or, if there's no market, recycled. PlanITROI handles that part of the job.

Much of what Jahromi collected during GSK's housecleaning two years ago was fairly current equipment -- generally ranging from three to eight years old -- although the company also collected older flash drives, CDs, monitors, printers, cables, fax machines and even an electric typewriter when it moved one of its data centers.

Jahromi admits that he didn't expect to get much money selling that typewriter, but he was surprised by the amount of money that the IT department was able to get by working with PlanITROI.

Harvest software, reap benefits

When IT pros think of tech gear disposal, they typically envision pallets of old PCs and used laptops. But there's a hidden asset to consider as well: the software loaded onto to all those hard drives.

Many companies don't have enough of a handle on their licensing agreements to know for sure which software must stay with the hardware and which can be taken off a device and reused elsewhere, says Barbara Rembiesa, president of the International Association of Information Technology Asset Managers.

In a 2010 survey conducted by the IAITAM, only 62.9% of respondents said that they harvest software licenses and put them back into the inventory when they prepare hardware for disposal.

"You want to recover that software," says Patricia Adams, an analyst at Gartner.

"If you're a company, you typically have a contract for X number of licenses, and you're entitled to use those. So if you're retiring an old asset, some of that software is transferable to the other devices. Doing that saves money."

The agreement between the firms calls for PlanITROI to keep 40% of the asset value when it refurbishes and resells GSK equipment. (Refurbishing includes installing Windows software with an authorized Microsoft license.)

"It's rare for an IT organization within a company, a non-IT company, to earn revenue," he says. "We now take that revenue and pump it back into the purchase of new equipment. So we're recycling the machines and the money."

 

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