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IT asset disposition: Time to offer end-of-life services?

IT asset disposition services let channel partner clients stay on the right side of environmental protection, regulatory compliance and IT security.

Harvard Partners, an IT consulting firm based in Boston, had helped its client through a large-scale data center consolidation and coast-to-coast relocation project.

Applications and data were successfully migrated from two California data centers to new servers in a Boston facility. But the customer had overlooked one detail: How to deal with its old machines still residing in the other side of the country.

Matthew Ferm, a founder and managing partner of Harvard Partners, said the customer found itself with 60 racks of equipment to break down and remove. And the task involved an urgent deadline: The customer's West Coast leasing arrangement was set to expire in 30 days. If the equipment wasn't out, the company would be compelled to renew for another year.

Harvard Partners turned to Brass Valley, a Milford, Mass., company that specializes in the field of IT asset disposition (ITAD). Brass Valley removed the data center gear and beat the leasing clock. The company also brought the equipment east, where the customer would have time to evaluate which components to keep and which to discard.

"They accommodated this situation and turned what was starting to be a panic into calm," Ferm said.

Channel partners typically focus on the beginning and middle of the IT story: Consulting with customers to identify their needs, implementing technology and providing managed services. What sometimes gets short shrift, however, is the final chapter -- dealing with excess or end-of-life hardware.

That's where IT asset disposition services come in. ITAD providers determine whether unwanted products can be remarketed and, if not, take responsibility for their proper recycling or disposal. They may also play an IT security role, destroying hard drives and ferreting out other technology components that may contain sensitive information.

The importance of asset disposition is growing for a couple of reasons. Virtualization, data center consolidation and cloud migration all create IT asset churn. In addition, the number of devices assigned to individual employees -- tablets, smartphones and laptops -- also contributes to the volume of electronic waste, or e-waste.

As a consequence, channel partners that have made a living installing and managing IT gear can now help customers get rid of it as well.

"ITAD is important … for the channel," said Brian Lovett, CEO of Brass Valley. "The VARs [value-added resellers] that are not active with asset disposition are like the car dealership that doesn't take trade-ins."

The e-waste challenge

Channel partners able to offer IT asset disposition services can help their customers address a number of pressing issues related to e-waste.

The international Solving the E-Waste Problem consortium estimates that businesses and consumers generated 53.8 million tons of electronic waste in 2012 and forecasted that the total volume of used electrical and electronic products would reach 72.1 million tons by 2017 -- a 34% increase over five years. The U.S. created 11 million tons of e-waste in 2012, second only to China.

The safe handling of redundant equipment is important since electronic devices may contain toxic metals such as mercury and lead. E-waste may end up being illegally shipped overseas or dumped in domestic landfills. But the ecological impact and breach of disposal regulations aren't the only problems. Discarded equipment also poses a significant security risk, according to industry executives.

Hard drives and their resident data are an obvious source of potential trouble. ITAD providers may take on that task of hard drive cleansing, offering different data purging techniques to accommodate customers' security needs. Many customers are content with repeated drive erasures and overwrites.

But customers with the highest security requirements want their hard drives shredded on-site, as well as erased and degaussed, Lovett said.  Additional steps include transporting the shredded remains to a refinery where they are pulverized in a ball mill grinder and then sent to a kiln.

As we do data center implementations, without fail what we are seeing is customers who are very concerned with how [they] get rid of the old stuff and ... dispose of it in an appropriate way.
Greg RicheyDirector of Professional & Training Services, Ingram Micro

But Lovett cautioned that organizations focused on hard drives may miss other vulnerabilities. For example, an enterprise may believe that erasing the drives of a no-longer-needed storage array will provide sufficient protection. That array's controller head, however, contains network credential information, Lovett said. Similarly, a smart power distribution unit (PDU) contains the customer's username and password. Remote access cards in servers and other data center devices are another potentially overlooked risk.

Companies focused on hard drives "have forgotten about embedded media," Lovett said.

In addition to concerns about environmental protection and security, there's the more mundane issue of logistics. An IT department may balk at dedicating personnel to deal with the multi-faceted nature of ITAD. That said, they still worry about asset disposal.

"As we do data center implementations, without fail what we are seeing is customers who are very concerned with how [they] get rid of the old stuff and … dispose of it in an appropriate way," said Greg Richey, director of professional & training services at Ingram Micro. The distributor in 2013 acquired CloudBlue Technologies, an ITAD service provider.

While ITAD helps customers avoid problems, it can also make them some money. If a customer's assets have resale value, the ITAD vendor -- or the channel partner offering an ITAD service -- provides the customer a credit, which offsets part, or possibly all, of the cost of the disposition service. In some cases, a channel company offering ITAD will provide a credit toward the purchase of new equipment.

Channel opportunities in IT asset disposition

The asset disposition management challenge creates an opening for the channel. Some channel companies have opted to create their own service lines to deal with used equipment. Cadan Technologies, for example, a managed services provider based in Eagan, Minn., offers its customers a lifecycle asset management plan that includes end-of-life asset removal and disposal.

Daniel Rogers, principal technology consultant at Cadan, said the increasing number of devices in the hands of users -- cell phones and tablets as well as traditional desktops and laptops -- contributes to an increasing volume of aging assets.

"We are seeing more devices at end of life," he said.

Other channel companies refer clients to an ITAD provider. Partners looking for disposal assistance can team with an ITAD specialist, a hardware vendor or a distributor. On the vendor side, Dell, HP and IBM are among the companies offering IT asset resale and recovery services. And distributors such as Arrow and Ingram Micro offer ITAD services.

Harvard Partners decided to work with ITAD specialty firm Brass Valley because "they understand the importance of [ITAD]," Ferm said. "It's just a headache you don't need."

Other channel companies have evidently reached that same conclusion. Lovett said IT consultants and VARs represent the fastest-growing portion of his business.

LifeSpan, an ITAD services provider based in Denver, also collaborates with channel partners. Cindy Miller, managing director at LifeSpan, said the channel currently accounts for about 20% of LifeSpan's revenue. She said the company aims to grow that business segment.

"We have some partners that white-label our services -- we come in under their umbrella," Miller explained. "We have some VARs and systems integrators who bring us in as LifeSpan."

She said LifeSpan accommodates most partner arrangements and can also provide ITAD marketing and sales tools to support the channel.

While partnering helps channel companies enter the ITAD market, the asset disposition specialists benefit as well.

Thomas Luther, business development, channel sales at CloudBlue, said channel partners help CloudBlue understand the end customers' needs. CloudBlue, as an Ingram Micro company, offers a range of services including onsite data destruction, asset recovery and remarketing, and e-waste recycling. Partners help their customers determine which of those services will best suit them.

"The ITAD market is not one-size-fits-all," Luther said. "Different clients have different requirements."

Choosing an ITAD partner

Doing ITAD right keeps the end customer on the safe side of environmental protection, regulatory compliance and IT security. So, channel companies must take care to select an ITAD partner that can stand up to the challenge.

Industry executives suggested looking at an ITAD provider's certifications as part of the vetting process. Those include the Sustainable Electronics Recycling International organization's R2 Standard for Responsible Recycling, the National Association of Information Destruction's AAA certification and Basel Action Network's e-Stewards certification.

Ferm, however, suggested that partners should look beyond the vendor's certifications.

"Go visit the company and see the operation and speak with their clients," he advised. "You have to do a little bit of due diligence."

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