Out with the Old IT

The typical three-year generational turnover in technology means organizations perpetually have excess equipment on their hands.

And while the emphasis in IT is generally on the new, the disposal of the old presents logistical, environmental and security challenges. How does one integrate the handling of obsolete items into an overarching IT lifecycle management program? What is the proper way to dispose of electronic waste? How best to prevent discarded hard drives from yielding confidential data?

Cost is a consideration as well. Gartner Inc. last year reported that enterprises selling 3-year-old PCs generally receive 3 percent to 5 percent of the original price, “but still incur net disposal costs of between $85 and $136” per unit.

A number of hardware makers and specialty recycling firms offer to shoulder businesses’ recycling burden. Some of those providers run programs that let resellers in on the recycling/disposal process.

IBM’s Asset Recovery Solutions program, part of IBM Global Financing, provides a recent example of such an initiative. Last week, IBM disclosed that business partners in the United States and Canada now will receive a referral fee for each customer who signs up for IBM’s recovery solutions.

“Our customers are increasingly concerned about the risk associated with the disposition of used IT assets,” says Jennifer Van Cise, director of asset recovery for IBM Global Asset Recovery Services. She says those customers don’t necessarily know the best way to deal with that risk.

Van Cise, however, believes that business partners can help fill that knowledge gap. “We feel very strongly that business partners are an important way for customers to increase their asset management capabilities,” she says. Partners, she adds, help customers with hardware and services and so are positioned to assist with the asset-removal process as well.

Those partners who buy into IBM’s thinking may be eligible for referral fees. Partners earn a 3 percent fee when customers hire IBM Global Financing for certain asset recovery services. Specifically, the arrangement covers IBM’s “Fixed Price Takeout,” in which IBM Global Financing buys back customers’ assets for a set price. In this case, the fee is 3 percent of the purchase price.

Also included is a revenue-sharing service, in which IBM sells returned equipment through a competitive bidding process and shares the proceeds. With this option, partners receive 3 percent of the revenue that IBM generates from the handling charge.

“This handling charge is for asset verification, test, prep for resale, and costs of executing the sales through one of IBM’s channels,” an IBM spokeswoman says.

In addition, the referral program covers IBM’s Data Overwrite service. Here, IBM sanitizes hard drives with a three-times overwrite process that IBM says makes data “virtually impossible to recover” and meets Pentagon standards. Overwrite options from 1x to 7x also are available. The referring partner gets 3 percent of the overwrite service fee. The same holds for IBM’s scrap services.

In all of the above cases, the business partner’s customer referral must involve at least 25 systems. Eligible systems (both IBM and non-IBM) include notebooks, desktops, printers, monitors and Intel-based servers.

IBM’s referral dollars provide a financial incentive. But for resellers, the broader appeal may well be the ability to offload one of their customers’ messiest IT chores.

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