Green Computing: Part 1
In the first of two articles looking at the environmental impact of business computing, IT PRO looks at the resurgent market for recycling and refurbishing PCs for business.
Click here to read part two of this feature.
As interest grows in 'green' computing and awareness of the environmental impact of IT (power usage, recycling of materials) rises, IT directors need to address the knock-on effects of IT resources on the carbon footprint of the business.
One straightforward option, albeit an alien one to most IT departments, is to stop buying so much brand new kit and make more use of older stuff.
Hardly a radical idea - it is one most households bar Premiership footballers' follow, after all. But for some reason the market for refurbished IT equipment, be that servers, PCs, or networking hardware, has never been that big.
This is surprising when you start looking at some of the economics at work in the market. Why do we need to buy new for each and every project? As an economy, we are spending a lot of money on hardware, and sheer common sense suggests trimming that in whatever means has to be beneficial. Data from the London Business School for instance suggests the UK networking equipment market will grow six per cent per year to $4bn (2.2bn) by the end of 2008, and our bill for servers will hit $3bn (1.65bn) in the same time frame.
Hardware lifecycles What is the lifetime of the average enterprise class server or router? On 'the side of the tin' it might say three years but the reality is probably more like five - and why shouldn't equipment once right for mission-critical functions slip easily into second line work if still functional?
Actually, a lot more refurbishing goes on than you might think - it's just not that structured a process. "A lot of great kit came on the market after the dot com bust in 2001, when you could pick up a $2m server for $100,000," points out Simon Forge, a Partner at Ptak, Noel & Associates, an analyst organisation that has recently started tracking the refurbished market in depth. "As a result a lot more CIOs are open to this way of purchasing, but it's taken time to get completely established."
Few companies specialise in just sourcing and reselling refurbished kit but one of the most prominent is US outfit Word Data Products, or WDPI, which has been in the business for some 20 years. The company has sales of around $700m, purely from refurbished hardware.
In November it released a survey of 200 UK IT directors and managers in what it claimed were large organisations that suggested a modicum of interest in recycling and redeploying pre-owned equipment. In that survey, 47 per cent of those polled said their company now uses a recycling/refurbishment specialist to dispose of redundant and terminated IT and networking hardware. A surprisingly large group in this sample, 40 per cent, report having a formal policy in place for re-using existing IT and networking equipment while a quarter of companies surveyed are currently using refurbished IT or networking equipment.
There is of course the related aspect to greener sourcing that a company can dump its own end-of-life equipment into this market, instead of just landfilling it or passing it on to the charity sector: with, hopefully, some return on all that investment. According to the WDPI survey 13 per cent of organisations literally just take their old stuff to the council tip (and 30 per cent send redundant kit to a charity or offload kit via a donation). Thus 47 per cent of this survey group acknowledge that passing on their no-longer-needed devices can get them money back or help with the cost of buying new stuff, and 54 per cent can see value in sourcing second-hand hardware to ease the cost of equipping non-core tasks like software testing.
If these figures are right, it means there has been something of a quiet revolution in attitudes to use of refurbished equipment, as a previous survey by the same company in 2005 identified only 10 per cent of companies compared to the current 25 per cent had bought more than one refurbished item. Plus, there seems to have been a rapid growth in formal policies being in place. Presumably, one can put this down to the rise in the green agenda in IT circles in the past few months - as well as the IT director (and financial director) having an ever-present need to watch the bottom line.
Refurbishing pitfalls Suppliers of refurbished kit - the majors (IBM etc) as well as some resellers - have to be careful about a few things, though. Software licences are basically impossible to pass on from one customer to another this way, so hardware has to be boiled dry of any code before being put on the market (so don't think you can craftily pick up Oracle or SAP business systems this way).
Secondly, it's vital that the customer doesn't just get someone else's box - specialist refurbished suppliers will dismantle the systems and reconfigure them for your needs, just like a brand new build-to-order system. Also ensure that all such material has been fully tested and is under warranty.
If these goals are met, which they should be when working with a reputable supplier, the rewards can be significant: World Data itself claims refurbished IT equipment can offer up to 60 per cent savings on equivalent new hardware investment.
Of course it's only the supplier's claim, but World Data Products offers an example of an unnamed 'multi-billion pound organisation' which has reported seven to one asset recovery ratio through the IT refurbishment route, i.e. each pound it gets back through selling on its old material translates to 7 of 'turnover'.
Another factor in all this is of course the secret truth that many an IT manager has spent time on eBay trying to track down cheap kit to plug a gap, stay within budget or keep a legacy system going which is out of warranty and not covered by a support contract. This might not be as dramatic as London Underground's staff, which in December 2004 were exposed by the BBC for using the online auction site to source missing bits for its infrastructure - but many of us have been there.
Forge says it's definitely time more IT directors looked at the refurbished route, given the potential for savings in cash flow, capital expenditure and support. Plus, the green angle: "Reusing what we have is a better long-term way of managing resources, and this way we won't be sending quite so much to China to be broken up."
"Over 50 per cent of a piece of hardware's carbon footprint is created at the moment of manufacture," adds Will Richardson, WDPI's European Sales Manager. "Use that kit for a longer period of time and you minimise that footprint growing. We expect a massive rise in interest in asset recovery and reuse as a result."