Reverse ITAD - having your cake and eating it too

By Jason Jellie, executive vice-president at Atlantix Global Systems.

This article is brought to you by Retail Technology Review: Reverse ITAD - having your cake and eating it too.

With the economy on the upswing, many large businesses are considering or about to undertake major technology upgrades-be it workplace computing (desktop/laptop), telephony, or data centre assets such as servers or networking. These companies have IT asset management teams tasked with keeping systems up and running throughout their lifecycle.  But when it comes to time to dispose of unneeded equipment, many of these companies are short-sighted.

Some businesses let old components pile up in a warehouse, out of sight and out of mind, and as time goes by they lose any residual resale value.  For others, the industry standard used to be "I've got a guy with a truck that comes by and picks up my old stuff-I don't get any money back but he doesn't charge me anything."

Let's say Company X wanted to physically destroy unneeded equipment, thinking that's the quickest, safest way to achieve a high level of compliance and security. Sure, that recycler can provide you the certifications.  But few companies took the time to learn what that guy with the truck actually did with those assets. But what Company X didn't realize is that those recyclers knew some of the units could be sold and not destroyed.  Granted, that recycler may not know how to sell them for the maximum value but they know how to sell them for something.  So they'd sell them to anybody on the open market.  Once that's happened, there's still a chance that equipment could end up in a landfill or shipped to an embargoed country.

In other words, how would Company X truly know if "that guy with the truck" was disposing the components in a secure manner, let alone know if the process was EPA compliant?

Today, companies are becoming more aware of the risks associated with disposing outdated or excess technology.  The new standard has become IT Asset Disposition (ITAD). Over the past decade many asset disposal firms have entered the marketplace, happy to take your technology inventory, giving you some small return on investment while pledging secure disposal while guaranteeing compliance.  And that's fine.  To be sure, when your company recycles technology, you need to manage the risks. But your mindset needs to recognise that there is recoverable value in these assets, much more than you realise.  That's where reverse ITAD enters the picture. A Reverse ITAD solution offers both compliance and value-in other words, you can have your cake and eat it too. Here's an example: say a large social media site is doing a major upgrade of their servers, ultimately taking 10,000 units out of service.  That enterprise can contract with a conventional ITAD recycler who might purchase the lot, offering a flat rate of $100 a server while securely destroying data and supplying all the required compliance certificates. Now the CIO of this social networking site is thinking great, we'll get back perhaps a million dollars.  Done deal? Not so fast. When this inventory goes downstream to a recycler, that recycler often has no idea how to identify where there's value because they don't have the expertise, the distribution channels or the demand for that equipment down to the component level.

The smart solution? Reverse ITAD, a Technology Asset Recovery System (TARS) that not only recycles but also refurbishes and remarkets.  Reverse ITAD eliminates the fragmented steps that businesses used to have to go through to get rid of technology.  Had that CIO chosen a Reverse ITAD vendor with the knowledge to inventory, test and audit the lot, the scenario would be different.  Analysis could show that about 4000 of those servers contained one RAID card that would be worth $150 above and beyond the value of the server.  That's potentially an extra $600,000 that can be recouped with the portfolio by breaking it down to the component level.

Despite the value a Reverse ITAD vendor can offer, some companies still think working with a conventional recycler has an advantage from a risk perspective. A Reverse ITAD vendor would have a team of seasoned sales professionals as well as product specialists on the intake team, in order to screen an incoming inventory portfolio in depth.

Whether it's Dell or HP or EMC or NetApp or Cisco, these product specialists get to know all the little components within every single device and what the market is for it, whether it should be resold in the US or overseas. They know where the demand is for that particular asset type.  They know whether to sell it as a configured server or to break it down to memory, processor, motherboard, hard drive, RAID card-even components such as drive caddies and rail kits are marketable. A Reverse ITAD vendor also has relationships with established downstream recyclers, so the accountability and transparency is there to give customers peace of mind every step of the way from decommissioning to dismantling for refurbishment to destruction. If your company is considering a high volume or regular refresh cycle, Reverse ITAD is a valuable strategic proposition. Your end-of-life equipment will reap a much higher return on investment without compromising compliance and security.