That Old Hardware Can Make You MoneyBy Pedro Pereira | Posted 2008-07-23 Email Print
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Solution provider Converge handles IT asset disposition and offers a service to channel companies thinking green.
Those old computers and printers taking up space
in a customer's warehouse aren't making solution providers any money. But they
Old IT equipment no longer in use has some residual value. It can be either remarketed, which is to say, sold whole or for parts, or recycled, according to Converge, a solution provider that specializes in IT asset disposition. The company had revenue of $365 million in 2007.
Government regulations require that old equipment be disposed of properly, for environmental and privacy reasons. Financial and personal data must be erased, and hazardous materials contained in the hardware can't just be thrown in the dumpster.
Beyond that, subassemblies and components often can be reused. When they aren't, raw materials are broken down for recycling. Asset disposition completes the cycle of a green approach to IT.
Chris Adam, director of asset disposition at Converge, says customers seek out the company to get rid of their old IT equipment increasingly because of environmental concerns. They want to take the proper steps to get rid of the hardware, but many also fear that any potential publicity around improper disposal would hurt their brands. If nothing else, some want to avoid the hefty fines triggered by the discovery of dumping."This is still a very new business problem, but one that's getting more and more attention," Adam says.
Kevin Washington, manager of IT services at Tyco International, says his company hired Converge in March for IT asset disposal. Converge already has conducted pickups at several Tyco locations, including Princeton, N.J., and Boca Raton, Fla., and Washington says he is pleased with the results.
Before the contract with Converge, Tyco's unused hardware would pile up in storage rooms and offices. By working with Converge, Washington says, Tyco is not only doing right by the environment but also being a good corporate citizen.
"We want to do things the right way," Washington says.
Tyco, whose holdings include security firm ADT Worldwide and various other businesses such as electronics and fire protection, had its share of bad publicity two years ago when two former executives were found guilty of siphoning out $600 million from the company.
Washington says Tyco refreshes about one-third of its equipment each year, so asset disposal is an ongoing process.
And that is also the case for countless other companies. Those that hire Converge typically recover 25 to 50 percent of their disposal costs through remarketing, says Adam. About 10 percent of customers fund the disposal entirely from the money they make back.
Seventy percent of the equipment the company handles is remarketed, he said. Converge in 2007 handled 70 million tons of e-waste, and the company expects to double that this year.
For the most part, the company has direct contact with customers, but it also partners with solution providers that don't handle e-waste. In such cases, says Adam, the company charges the partner a fee, which the partner has the option of marking up to the customer.
Converge offers customers and partners a plethora of services, including removal of data, hardware pickup and on-site equipment shredding. Customers can track the process through a tool on Converge's Web site, much as one might track a UPS package. Customers receive documentation, such as certificates of disposal, recycling, destruction and data erasure, once the process is complete.