That Old Hardware Can Make You Money

Those old computers and printers taking up space
in a customer’s warehouse aren’t making solution providers any money. But they
could.

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.