By Baselinemag  |  Posted 2006-09-01 Print this article Print

The business of recycling information-technology equipment is booming.

Growth Industry

Handling e-waste is a booming business. IBM, for example, says it processes 22,000 pieces of equipment every week at 22 facilities worldwide, amounting to more than 59,000 metric tons of used gear per year. The need for such services will only grow, IBM says; the company forecasts that 600 million PCs currently in use at corporations will be due for retirement by 2010.

Why not just put the stuff up for sale on eBay? Linda Demmler, IBM's director of worldwide sales channels for global asset recovery services, says the No. 1 concern of clients is data security: making sure the hard drive is completely unreadable after it leaves their offices. Environmental issues come in second, followed by recovering value of assets.

John Frey, HP's manager of corporate environmental strategies, agrees that data privacy has surfaced as the top priority for companies getting rid of old PCs: "Some people say, 'We don't want this recycled—we want the hard drive ground into tiny little pieces.'"

PC disposal companies don't simply dump computers into landfills. That is, by law they're not supposed to, though some rogue operators have been caught doing so in the U.S. and abroad.

Larger firms say they strictly follow government regulations concerning electronics disposal. And actually, most machines can be reused whole or in part. IBM estimates that just 1.43% of the material by weight it handles ends up in a dump. At least 50% of the machines Newmarket IT receives can be refurbished for resale, according to Zeigler; the rest are harvested for parts. Whatever can't be sold as a part is broken down into materials—plastics, steel, precious metal on the motherboards—and sold to commodities brokers.

"There's a lot of recoverable value in these machines," he says. "There's really no trash. We use every part of the buffalo."

But that trash-into-treasure alchemy doesn't necessarily mean you'll get cash for e-junk. For machines older than four years, the best outcome may be for the value of the parts to offset disposal service costs, says Gartner's O'Brien. "The key misconception many organizations have is that their equipment is actually worth something," she says.

Disposal firms charge about $25 to dispose of a machine with no resale value, plus additional charges for other services like "hard-drive sanitizing," which can run between $7 and $25 per machine.

But, O'Brien notes, rates are highly negotiable: "It's a very immature industry, so pricing is all over the place."


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