A PUBLICATION BY HORIZON TECHNOLOGY
THE SUPPLY CHAIN PROFESSIONAL’S GUIDE TO
THE INTRODUCTORY GUIDE TO
HARD DRIVE DISPOSITION & REMARKETING
TO MAXIMIZE COMPANY PROFIT
TABLE OF CONTENTS
PAGE 2
Ch 1. Introduction
PAGE 4
Ch 2. What is IT asset disposition (ITAD)?
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Ch. 3 How can asset recovery turn a cost center into a profit generator?
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Ch. 4 Maximize remarketing revenue by choosing the right ITAD vendor
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Ch 5. Which markets are most rapidly decommissioning drives and why?
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CHAPTER ONE
We are living in a time of big data -- and that amount of data only continues to grow. We leave our digital footprint practically everywhere we go -- with every email sent, document created, credit card or membership reward card swiped, every social media update posted, photo uploaded or mp3 file backed up, we continually contribute to the ever-growing mass of data that’s stored on the hard disk drives of servers in data centers around the world.
From an end-user perspective, it’s fantastic. From our selfies to our virtual desktops, we “carry” the data that makes up our digital lives on our smartphones and can access it anytime via a cloud. On the backend, however, big data causes big problems.
As the amount of data increases, the need for data storage grows. As a result, the amount of hardware -- specifically hard drives -- exponentially increases to meet the need for
INTROdUCTION
physically storing and backing up all of this data.
This raises a set of challenges: What do you do with the old decommissioned hard drives? How do you dispose of them without compromising private information? Are you following NIST 800-88 Guidelines? And will the disposal of old hardware meet environmental standards of corporate social responsibility? Perhaps most importantly, how do all of these issues surrounding old hardware affect your bottom line? This is where IT asset disposition (ITAD) offers solutions.
CHAPTER TWO
What is IT asset
disposition (
ITAD
)?
IT asset disposition encompasses the range of services available to handle an organization’s end-of-life hardware. Chief among these is data sanitization, a process in which special software and equipment is used to wipe hard drives and ensure that any remaining data is removed in a way that satisfies any internal and external privacy and security requirements.
ITAD also includes recycling, a crucial function that salvages any serviceable components while recycling raw materials in an environmentally sensitive way.
Alternatively, some companies opt for completely destroying drives -- whether it is by shredding or even drilling them. This is seen more commonly in industries such as medical device manufacturing, where data is particularly sensitive. For many companies, however, the area of ITAD that may be of particular interest is asset recovery, or remarketing. Greg Wilson, a senior account manager who plays a key role in Horizon Technology’s Hard Drive Disposition and Remarketing Program, explained that the reason for this is because . . .
WHAT’S ITAD?
ASSET RECOVERY IS AN AREA WHERE AN ORGANIZATION HAS
THE POTENTIAL OPPORTUNITY TO recapture some residual
value of end-of-life assets, whether it is through
resale or redeployment.
- GREG WILSON
CHAPTER THREE
How can
hard drive remarketing
turn a cost center into
As Greg further explained, destroying or recycling assets provides no revenue to a company and often represents a cost of doing business. Rather than throw away drives when they’ve already become a depreciated asset, an organization can deploy an asset remarketing strategy that either can either make or save money.
Reselling IT assets literally puts money back into the company. Once an old drive has been deinstalled, wiped and prepared to be resold, the true challenge becomes how to maximize the amount an ITAD customer makes off of the pulled hard drives. While most recovered drives are sold into the broker market, there is more money to be made selling to certain OEM customers. A great ITAD vendor will have sales channels that include these OEM customers and, as a result, will be able to command a premium for old drives.
As an alternative, redeploying assets within the company can save a company money. Instead of simply including drives in whole machines that are being junked, some organizations opt to use an ITAD vendor to help them deinstall and re-use hard drives within the same organization. As a result, they get to save money by not having to spend money on new hardware.
Because companies have realized this value, asset remarketing has become increasingly popular over the last fifteen years. Most large enterprises now even plan for the reverse supply chain impact when making forward supply chain decisions.
How can hard drive remarketing
turn a cost center
CHAPTER FOUR
Maximize remarketing
revenue by choosing the
A number of factors dictate the amount of revenue an organization can make through selling its used hard drives. The age, condition and general market value of the drives certainly play a role in their value.
However, it is an ITAD vendor’s remarketing network and industry experience that makes a powerful impact on its ability to minimize the costs of asset disposition -- such as deinstallation, transportation, and data sanitization -- while maximizing the profit that results from reselling those drives.
It may sound obvious enough, but one of the most important factors to take into account when choosing an ITAD vendor is to opt for one who is an expert in the hard drive industry:
• Is your ITAD vendor a distributor who has direct relationships with the major hard drive manufacturers?
• Does your vendor have a truly global presence that includes offices and teams around the world?
• Does your vendor have a well developed sales channel that includes OEM’s to whom it can sell drives at a premium, thus maximizing the return on your old drives?
• Does your vendor have a proven track record of remarketing excess stock, but still have the ability to hold inventory and perform disposition services tailored to its customers’ needs?
Answering “yes” to all of these questions indicates a vendor with a high level of expertise and the ability to help maximize its customers’ return on old drives.
Maximize remarketing revenue by
choosing the right ITAD vendor
CHAPTER FIVE
SO, Which markets are most
rapidly decommissioning
One only needs to look to the proliferation of cloud storage services and the data centers in which they’re hosted to get an idea of some of the largest candidates for asset recovery services. For example, Google has long described itself as having
“hundreds of thousands” of servers.
Microsoft revealed that it had at least 1 million servers in its data center infrastructure and Microsoft CEO Steve Ballmer surmised that this number was less than Google, but more than Amazon.
While it’s impossible to extrapolate an accurate figure when it comes to the number of hard drives deployed in these servers, even a very conservative estimate easily puts us in the multi-million unit range.
Which markets are most rapidly
decommissioning drives and why?
WHEre does this resalable inventory come from?
Another factor that drives data centers to more rapidly decommission drives than other markets is to accommodate consumers’ voracious appetites for more storage. As we continue to create more data -- and the subsequent need to store it -- data centers are always working to find new ways to increase their storage capacity within the limited restrictions of their physical space. One of the best ways to do this is to upgrade to higher capacity drives. As new drives replace old ones, those old drives represent an opportunity to be resold.
CHAPTER SIX
The future of ITAD and
asset recovery
The trend in market consolidation and improvements in technology are changing the face of ITAD. In an effort to add ITAD expertise to their suite of service offerings, large electronics distributors increasingly have sought to acquire small-to-medium sized ITAD vendors -- a move that raises concerns about reductions in competition and quality of service. However, a very large number of new, smaller players also continue to enter the market.
While some of these new market entrants represent formidable competition to their much larger counterparts, this rapid proliferation also poses a new challenge for customers. Customers need to do an appropriate evaluation of these vendors’ ability to execute disposition services properly and quickly sell material.
Furthermore, it is crucial for a company considering ITAD to assess its current EOL and reverse chain strategies. Once this is established, an organization can look to an expert ITAD vendor to help save -- or even make -- money on its hard drive supply.
Finally, a key element that drives ITAD is the fact that technology is constantly evolving -- and at an even faster pace than it used to. While the current highest value for return is in hard drives, the opportunity may sway to solid state drives as they become more widely used. In addition, consumers’ healthy appetite for the latest and greatest technology provides even greater growth and opportunity for older technology to be reused, repaired or resold.
