The Business Case For IT Asset Recovery

As data becomes increasingly central to business models everywhere, overall spend in data center hardware continues to grow. This is hardly surprising. It’s a good time to be in the data center, with a recent survey by AFCOM pointing to companies of all sizes planning to increase the total number of data centers in their respective organizations by almost 50% (from 12 to 17) across the next three years.

Of this number, each organization expects to renovate a third of its data center portfolio between now and 2022. That’s a lot of hardware to decommission, refresh, or migrate.

At the same time, let’s not forget the ongoing investment of the hyperscalers in their cutting-edge data centers. Momentum around hardware innovation, in particular open source hardware, in the hyperscale data center is picking up not slowing down. A recent study conducted by IHS Markit on behalf of the Open Compute Project Foundation found that revenue share for OCP hardware is set to rise to more than 5% of total market share by 2022. Who knows where this figure will land by the end of the coming decade.

Amid this relentless investment, the importance of IT asset recovery, the reclaiming of value from used (and excess) data center hardware, will keep on growing. It’s a win-win proposition. Businesses that embrace asset recovery, as part of their overall strategy around IT asset disposition (ITAD), will prosper while doing good.

But what exactly is the business case for IT asset recovery? There are three main arguments from my perspective: operational, financial, and environmental, each compelling for its own reasons. Let’s start with the operational.

OPTIMIZING YOUR BUSINESS OPERATIONS

There are many questions to ask around the deployment and management of your data center hardware. Did you set up your asset management database in a logical fashion? How is performance data like ‘Mean time between failure’ informing your procurement cycles?

Even logistical questions, such as whether you are getting the best rates from carriers when shipping data center hardware, have a business impact over time. From procuring IT assets to configuring them, managing hardware doesn’t take care of itself.

No wonder once the hardware is installed and working, it’s tempting to think the job is done. But with constant advances in technology, the frequency of refresh cycles is increasing.

A 2019 survey from Spiceworks found that more than a third of organizations plan to purchase new server hardware within the next 12 months, and an additional 25 percent intend to buy servers within the next one to two years. Again, that’s a lot of hardware to deinstall and replace.

But it’s not simply refresh cycles and equipment failure driving the accumulation of hardware in the data center. How much excess inventory do you have gathering dust in your loading dock or warehouse? Is this hardware you will likely deploy in the next 12-24 months? By taking a proactive approach to IT asset recovery, you will unearth steady and meaningful value from your retiring and excess inventory.

You will also be reducing your liability for the safekeeping of the data on your used hardware. As a recent study from Accenture points out, the greatest threat to data security remains human error.

You may have stringent sanitization technology in place, but this means nothing if you don’t also have a watertight process for making sure every drive gets processed safely. And as every manager knows, managing people and setting expectations around process compliance is perhaps the most difficult of practices to develop effectively not only in the data center but in any workplace.

This is where having a comprehensive approach to IT asset recovery will stand you in good stead. An IT asset recovery specialist will help you bring robust workflows to bear on your data center hardware to ensure nothing slips through the cracks operationally.

RETURNING FUNDS TO YOUR IT BUDGET

The second key argument for IT asset recovery is financial: not only will asset recovery help streamline your hardware management, it will return dollars to your bottom line. Funds can be added back to your IT budget for future investments, or held as a credit for the purchase of new inventory through innovative programs such as Horizon Technology’s Trade In, Trade Up.

Of course, getting customers to understand the revenue benefits of asset recovery takes time. But after several rounds of successful asset recovery, organizations usually grasp the positive implications for their P&L. By establishing a supplementary revenue stream that the client wasn’t otherwise expecting, the funds associated with IT asset recovery become a staple element of their financial planning.

For anyone managing data center hardware, trust an IT asset recovery expert to help you not only manage your future needs but recover maximum value from what you no longer require.

That said, do your due diligence before signing any vendor agreement. Not all asset recovery programs offered by ITAD companies are the same, and you should be prepared to ask searching questions of your potential vendor before committing.

SUPPORTING THE CIRCULAR ECONOMY

The third and equally important argument for IT asset recovery is environmental: in the spirit of the circular economy, IT asset recovery secures second (and sometimes third) lives for used IT equipment. Factory recertified drives are a great example of the circular economy in action. Similarly, when we break down a used server and harvest its components for the secondary market, we are supporting sustainability in hardware manufacturing.

It’s not just companies like Horizon Technology banging the drum for sustainable production. Enterprises such as Dell EMC and HPE have invested significant resources in the development of sustainable manufacturing, and with good reason.

Both organizations are on a good track when it comes to advancing their respective goals around the circular economy. Dell recently announced it has met its 2020 goal of recovering 2 billion pounds of used electronics across both consumer-facing and enterprise hardware. However, there remains much work to do. Research from HPE Financial Services indicates almost a third of leading companies do not yet have an environmental sustainability strategy specific to their IT organization.

Whichever way we look at it, the focus on greening the data center is unavoidable. Data centers are becoming more power hungry not less. As computers support increasingly intensive workloads, the physical demands on the data center are growing sharply.

Just ask the hyperscalers. From Google to Microsoft and beyond, the global giants of data center innovation each agree that data center cooling will remain a key challenge in the years ahead as they busily experiment, together and individually, with liquid cooling technologies.

Even where green IT strategies are already in place, attention must extend beyond initiatives simply to tackle power consumption. “Objectives aligned to Circular Economy principles like reusing end-of-life products, remarketing idle resources, and extending the life of IT equipment should be integrated into IT sustainability plans as well,” the HPE report observes.

It’s a compelling point. There’s little doubt the emphasis on continued adoption of open source hardware in the data center, including an uptick in the procurement of disaggregated servers where the CPU and storage components are separate, will only drive refresh cycles by making the replacement of individual machines easier.

“Green computing is not just energy-efficient computing, or using less natural resources like freshwater, there’s also e-waste,” Intel CTO Shesha Krishnapura remarked in a recent interview with Data Center Dynamics. By adopting an IT asset recovery program, organizations are able to bring the latest and greatest hardware onstream, while ensuring that retiring equipment is not simply left on the trash heap.

Whether you’re Intel, Dell, or a small-to-medium-sized player looking to punch above your weight, businesses everywhere have a critical responsibility in bending the curve when it comes to advancing the circular economy by reducing e-waste.

INTELLIGENT COMPUTING

Nvidia CEO Jensen Huang recently remarked that the data center has become the most important computer in the world.

Speaking to CNBC after the announcement of its agreement to acquire high-performance networking firm Mellanox, Huang said a long-held view of the data center as a collection of disparate hardware was out of whack with reality. “The thing that’s really exciting is that the computer no longer starts and ends at the server,” he maintained. “The computer in the future will extend into the network.”

As organizations plow more time, money, and resources into the hardware that powers data centers, we will be wise to devote comparable amounts of time into figuring out how most intelligently to repurpose this equipment when it is no longer needed for its current function.

If data centers are the connected brains of computing infrastructure in an always-on world, the intelligence with which we manage data center hardware will largely define how truly sustainable our data centers become from an operational, financial, and environmental perspective.

In my assessment, the arguments for implementing asset recovery are stronger than ever. Recouping value from hardware assets that were previously viewed as little more than a disposition headache is obviously good for the IT budget. But the best ITAD company will go beyond simply asset recovery, and focus on developing a long-term relationship with the client based on its ability to offer trusted advice around the hardware marketplace.

At Horizon, we are proud of our track record in developing asset recovery partnerships with our clients that not only stand the test of time but grow in response to changing circumstances and technological advances. The specificity and robustness of our workflows are core to the way we do business. Our record keeping, the security of our systems, and the competency of our process reflects directly on the competency of what we do and who we are.

From returns part management to kitting, shipping and everything in between, we are an IT asset recovery operation that has developed long-standing relationships not only with the OEMs but a wide range of standout players in the industry. Our factory recertified drive program is industry-leading and the expertise of our team is second to none.

You want to work with a partner that is trusted, and that has industry-specific knowledge and a true understanding not only of your business but of the global marketplace and where they will be selling their assets to help maximize value recovery.

For us, the business case for IT asset recovery is something we live and breathe every day. We take IT asset recovery seriously so you can access all of its benefits without the heavy lifting. Contact us today and let’s see how we can help.

Mark Kier is director of business development at Horizon Technology. Connect with Mark on LinkedIn.

Source: The Business Case For IT Asset Recovery