Maximizing Asset Value Recovery to Offset the Cost of Decommissioning a Data Center

Today’s enterprises depend heavily on the applications, services, and data contained within the data center. But at some point, there will come a time when an enterprise needs to re-evaluate its existing technology, consolidate IT infrastructure, or migrate to a new site. In these cases, existing data centers, whether on-premises or in co-location facilities, may need to be decommissioned.  

Successfully decommissioning an enterprise data center requires organizations to allocate significant budget and resources. The good news is that overall project costs can be offset by recovering the residual value of the removed assets. Equipment that can still be used can be resold on secondary markets, while obsolete technology may still have recoverable materials or components that can be valuable when properly recycled.  

By choosing the right Information Technology Asset Disposition (ITAD) partner and allocating sufficient time before the project to develop a strategy, enterprises can keep e-waste out of landfills, reduce the cost of the project, and maximize the value of their IT assets. 

Maximizing Asset Value Recovery to Reduce Project Costs

There are many reasons why an enterprise may decide to decommission a data center. Shifting real estate strategies may drive enterprises to consolidate their current office spaces, while a new product or service may require improved performance to deliver a better customer experience.

Whatever the reason, the equipment, IT infrastructure, and critical infrastructure that is removed from the data center likely still has residual value that can be recovered on secondary markets.

The market for used IT assets continues to grow. In the US alone, the ITAD market was worth nearly $6 billion in 2021. Globally, the market is projected to grow to $24.5 billion by 2026. And that’s just the assets that can be resold. Electronic waste that cannot be resold on the secondary market often contains precious metals such as gold, silver, copper, and platinum that can be recovered through proper recycling. 

A 2020 UN report found that just 17.4 percent of the world’s discarded electronics were recycled, leaving approximately $57 billion worth of high-value, recoverable materials dumped or burned rather than being collected for reuse. 

The challenge for most enterprises lies in how to access this potential value. Because reselling used IT assets is not their primary business, most do not have the people, processes, or relationships in place to get the most out of their assets. As a result, a 2020 survey found that only 23 percent of respondents looked to resell IT equipment on the secondary market, while nearly 4 in 5 companies either chose not to or simply didn’t consider it.

Choosing the Right ITAD Partner When Decommissioning a Data Center

Depending on the capabilities and size of the IT team, enterprises may turn to an ITAD provider to help manage the decommissioning project, remove the equipment from the data center, and dispose of any assets that are no longer needed.

That said, not all ITADs are created equal, and which company an enterprise decides to work with can have a big impact on how much value they can expect to see from their IT assets.

There may be plenty of companies that can remove, resell, and dispose of IT assets, but if they do not understand the data center environment, they are prone to missing details or skipping important steps in the process. Without knowing the intricacies and interdependencies that affect application or production environments, they can easily make a mistake that results in a data breach, downtime, regulatory fine, or lost business. 

When choosing a partner, enterprises should carefully scrutinize their credentials, certifications, insurance coverage, data breach notification policies, and the scope of the contract. The partner should also have established relationships with trusted resellers or recyclers to ensure enterprises get a fair price for their equipment. 

Be wary of ITADs that use terms like “certified data destruction” as there is no single data protection law at the federal level in the US. Similarly, enterprises should watch out for ITADs who offer to remove the equipment au gratis, as most of the time, they are simply trying to acquire the assets and expedite the sales. 

Plan to Maximize Asset Value Recovery From the Start

Unaware of the complexities of the project, many enterprises do not spend enough time during the planning phase when decommissioning a data center. But by dedicating sufficient time, budget, and resources before the physical removal of the equipment begins, enterprises can develop a clear strategy and mitigate the risk of issues down the road. 

At this stage, enterprises should create a list of all IT assets that will be removed from the facility. With this information, they can work with a trusted IT services partner to determine what can be resold, what can be recycled, and what should be disposed of. This way, they can be sure they are getting the maximum possible return from their assets to offset the cost of the decommissioning project.  

 

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