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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.

Not all organizations are following GSK's example. In a 2010 IAITAM survey of some 150 IT managers attending the organization's annual conference last year, only 56% of respondents said they consider the disposal of hardware and harvesting of software a priority, and only 14.3% listed cost savings or money-making as a matter of high importance for their organization. "As far as companies and the maturity of IT asset management, we're still very young," Rembiesa says. "There are companies that have a good maturity out there; others are just coming on board."

Right now, most firms use disposal companies, she says, and many of those disposal companies turn around and resell equipment on the secondary market -- but the original company often does not benefit from that resale cycle.

"It's up to [the owner of the IT assets] to negotiate a return on any resale," Rembiesa says. "Some disposal companies are giving it back [to the original company], some are not. But with a little bit of due diligence, organizations can find a company that can give them a return."

PlanITROI is one of a number of companies working in this space. Redemtech, TechTurn and Arrow-Intechra are others that will give part of the proceeds back to the originating IT group.

In addition, the large computer equipment companies offer services that help their customers recapture some of the residual value of their old technology.

IBM, for example, offers a "fair market value lease" in addition to its more traditional full-payout lease, says Linda Demmler, director of worldwide sales for IBM's Global Asset Recovery Services.

Where companies with a full-payout option lease their equipment to own, she explains, the fair market lease allows them to pay a lower amount upfront and then, at the end of the lease, gives the equipment back to IBM, which can then refurbish and resell it on the secondary market.

 

Value can vary

Several factors can affect how much, if anything, an organization can get back when working with a vendor to sell on the secondary market, IAITAM's Rembiesa and others say. The biggest issue these days is the age of the equipment.

Many companies have been holding on to their IT assets for as long as possible, stretching out their refresh cycles to avoid having to spend during the down economy (see "The average life cycle of common hardware," below). But Rembiesa points out that they won't be able to get much, if anything, for PCs and servers if they're too old.

 

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