IT asset disposition (ITAD) is a business that focuses on discarding obsolete or unnecessary equipment in a safe and environmentally responsible manner.
Valuates Reports’ data show that the global IT Asset Disposition market size is projected to reach US$15,920 million by 2027, from US$8,391 million in 2020, at a CAGR of 9.6% during 2021-2027.
Mark Pesce, author, entrepreneur, and innovator hosted “Saved from the Bin”, talking about maximizing IT asset dispositions benefits along with Dynamic Business and Iron Mountain.
Mark: “Now, the past 18 months have been very unusual. They’ve been unique. They are radically accelerating the acceptance of work from anywhere. This is a state we thought we’d probably be in at the end of this decade.
“A recent report from Gartner found that about two-thirds of businesses in Australia and New Zealand expected that work from anywhere would be increasing this year.
“And that survey was taken before Sydney went into its forever lockdown before Melbourne went into its sixth lockdown. These last 18 months, they have permanently changed the face of work. That means that they’ve changed the way that we use our work tools.
“If you think about this, the world spends over five trillion dollars a year on IT, and we have been wondering, why are we spending all this money? What’s it been good for?
“We didn’t see the huge optics and productivity that we thought we should see with such a continual investment. And well, that was true until we saw the entire world of white-collar work turn on a dime 18 months ago; everyone began working from home without really missing so much as a beat.
“And what we learned in that transition is something that we are never going to forget. It is already showing up in IT buying patterns because IT purchases ticked way, way up.
“Last year, that tick-up kept pace. Everyone is working from home either because they can now or because they have to now. And that means everyone has needed upgrades. They needed better laptops.
“They needed better webcams. They needed better microphones. They needed all of the things to support all of the zoom calls that they were all doing all of the time. And that meant that we were suddenly caught out with a generation of now obsolete machinery.
“And these machines, they were perfectly capable pre-pandemic. Some of them were sitting on desks. Some of them were sitting in the data center, but how we use all of that kit has suddenly and now forever changed.
“And so those machines, they’re no longer fit to the task. And that means that there is now a growing mountain of equipment that’s ready for the bin, and that’s a sticky proposition right there because the folks in the organisation who are charged with buying and maintaining that equipment are not skilled in that sort of resolution.
“It’s not what they do. And that can mean that all sorts of things can happen. What kinds of things can go wrong? Well, this is where we need to bring in an expert.
“Brooks Hoffman is principal on the project management team for Iron Mountain, where he supports their secure IT asset disposition program responsible for coordinating global delivery across Iron Mountain’s network of 32 countries. With 18 years of experience, Brooks is exactly the right person to be asking.
Mark: “Welcome, Brooks.”
Brooks: “Thank you. Mark pleasure to be here.”
Mark: “All right. So, Brooks, we have IT departments all around Australia in New Zealand, and the whole world. They all just got a whole bunch of new kits. That means they’re currently sitting on a whole bunch of old kits that no one wants to use.
“Because a lot of the systems maybe don’t have a webcam, or they’re too slow to handle a day’s worth of Zoom calls because of things like that. They’re not cutting it anymore, and they’ve been day-to-day workhorses for all of the staff. We need to get rid of them now, so can’t we bin them, or are there other things we need to consider here?
Brooks: “Well, throwing them out is not an excellent idea for a couple of reasons. First of all, many of these items have hard drives or other data-bearing media on them. So if they wind up in the wrong hands, you could have a data breach on your hands.
“The other thing is, you don’t want any of this stuff going in the landfill for a couple of reasons, as in many places, depending on where you live, that’s illegal, but also represents an environmental risk.
“This equipment contains several heavy metals, flame, plastic, and other substances that are hazardous to human health. So you don’t want that sort of thing leaching into the water table. Second is privacy risks and environmental risk, so simply throwing it out in the trash isn’t a viable option either.”
Mark: “So what we’re saying is, if we throw it out of the trash, not only could this pollute the environment, but you could be giving away the crown jewels of your business if they’re stored on a hard drive?”
Brooks: “Absolutely, there was recently a case of a global Investment Bank that was fined 60 million dollars for improper disposal of some of their IT equipment that had customer information on it. So the consequences can be dire.”
Mark: “Right. So this represents not just a threat to the security of the business, but a real threat to the regulation of the business and the business’s bottom line.”
Brooks: “Yeah. The bottom line and the business’s reputation. I mean, the cost in terms of a fine might be in the millions, but the cost in terms of market cap for a public company can be in the billions.”
Mark: “All right, so we get it. IT departments should not try to do this on their own, because it could end very badly, very expensive. But does that now mean that we’re forcing a new cost onto this business?
“Because a lot of businesses, because of the pandemic, are running on the smell of an oily rag. There’s no real capital left to be able to spend on these sorts of things. So how can they afford this new cost that you’re asking them to absorb?”
Brook: “Well, one of the things that many IT leaders are surprised to find is that although this equipment has reached the end of its useful life, it may still have fair market value, and it can be wiped of data. New operating systems can be installed, and they can be resold.
“It still has value, and the iPad company or IT disposition company that provides this service, and we market the equipment, will typically share a percentage of the resale proceeds with the original owner of the equipment. This can, in turn, lower the total cost of ownership of the equipment. It can help offset other disposition charges.
“So there is a financial benefit to going through the remarketing of equipment that does have remaining fair market value.”
Mark: “So I guess then what we can say is that I can present you with the piece of equipment, and we can if you decide that you’re going to remarket it, and I decide that it’s alright, then I would get a proportion of the sale of that remarketed asset ?”
Brooks: “That’s correct.”
Mark: “All right, that’s clear. But it still left me a little bit confused because you have just explained how careful we need to be with the equipment and how careful we have to be about making sure it doesn’t end up in the wrong place.
“But now you also want me to remarket it. So isn’t that simply going to recreate the same problems? I mean, how can a business be assured that they’re not handing over the keys to the kingdom when really all they’re trying to do is recover some of the costs of actually being able to get rid of this equipment?”
Brooks: “So a vital step in the remarketing process is for the data to be purged. And usually, that’s done through a software program that overwrites the data. It puts ones and zeros on the hard drive and eradicates all the data.
“A lot of organisations mistakenly think that you can delete something, And that’s that will purge that data from that from the hard drive.
“And that’s not the case. But this software is very specialised. It’s been developed in order to cleanse the data completely. So once that’s done, there’s nothing left. The new operating system is installed.
“And basically, the device is resold with no remaining data on it. Any device that fails to test, or because of maybe the age or condition of the asset, doesn’t have fair market value.
“Those assets are recycled, and the hard drives are pulled and shredded. So either way, none of the data resides on the equipment, and, and there’s no chance of the data breach.”
Mark: “Right, because you certainly aren’t going to get data off of a shredded drive. Many more modern systems in the last five years also now have what we would call a secure enclave where sometimes password, data, or biometric data is stored. Is that data also being wiped out from these devices?”
Brooks: “It is. Because that’s going to be a big thing. Because of Windows 11, you have to have a secure Enclave for us. You can’t stall Windows 11.”
Mark: “Alright. So Brooks, in general, as you said a little bit earlier, used computing equipment often ends up in a landfill that’s not great for the environment. You know, we know that IT equipment will regularly contain lead. It’ll have mercury.
“It’ll contain cadmium, which is more dangerous than either lead or mercury. Those things that you don’t want in your soil. You don’t want it in your water.
“We have probably all seen photographs of these vast dumps that end up being in developing countries, where the boards are pulled apart for the small amount of gold that they might contain.
“But that then ends up polluting the area and polluting the people as well, poisoning them. How can we avoid that? I mean, if a business doesn’t want to remarket their old kit if they do want it disposed of, can it be safely recycled or decommissioned?”
Brooks: “Absolutely. So, there are customers that, for whatever reason, for security purposes, don’t want their IT equipment remarketing. And what happens to it is it’s dismantled into its components.
“So it’s separated things like the plastic, the metals, the things like chips and other things that can be harvested are removed. Later, those component commodities are sent to refiners, where they’re melted down and they’re reused for other things. So nothing ends up in the landfill.
“And one of the questions one should always ask when dealing with an IT assets dispossession company is what are your recycling practices, and do you have a zero-landfill policy? And are you certified to some third-party standard that assures that you are in compliance with your state and policies?”
Mark: Well, okay, I guess that makes the question, are you certified?
Brooks: “So Iron Mountain works with only certified partners and their two major IT asset disposition certifications. One is called R2, which stands for reset, responsible, recycling. The other one is e-Stewart’s.
“These are internationally recognised standards. Third parties administer them, and they’re subject to audit and very thorough and subject to a routine audit and inspection. So yes, in short, we only deal with certified recycling partners.”
Mark: “And that would be important because a lot of companies now, particularly at the board level, they’re adopting ESG practices in ESG guidelines, which means they have to report to their shareholders that they are disposing of their assets in a way that’s not dangerous to the environment, Right?”
Brooks: “Absolutely, and one point I would make on the sustainability front, and this is something that people don’t always think about, but in addition to the economic benefits of remarketing, it is also a much more green or sustainable approach to IT assets dispossession because you’re extending the useful life of the asset and it’s it can be up to 20 times less energy-intensive and recycling.
“When you have to tear it down and invest a lot of energy melting it down and reusing it into another project, and this makes sense because again, you’re taking an asset and simply making it clean before it gets reused rather than taking an asset ripping it down.”
Mark: “I mean, one of these operations is just a lot more intensive than the other.”
Mark: “Alright. So all of this has probably gotten all of you thinking. You probably have a whole bunch of questions. It is time now to invite Heidi Heck from Dynamic business.”
Heidi: “Thanks, Mark, and hello, Brooks. Yes, there have been a few big questions coming in from the audience. The top of the list is a really simple one — what kind of materials are you able to take into the security asset disposition program?”
Brooks: “So I used a quip when I would be asked that question, and we took anything with a plug. We can’t take anything with a plug generally. We don’t take white goods like refrigerators and air conditioners because certain issues exist with the coolants used.
“But you know, all range of IT assets — printers, laptops, PCs, servers, point-of-sale equipment, scanners, fax machines. Really, anything that would be used in an IT environment can be processed.”
Heidi: “So does a business have to take their kit to you for disposition? And if so, where?”
Brooks: “So no, we offer pickup service. So we have a very extensive lead of secure vehicles. Chances are, if you live in Australia, you may have seen our trucks on the road.
“Alarm GPS monitored, and we can arrange secure transport. In some cases, if it’s a remote location or we have capacity constraints, we use a thoroughly vetted third party. We do go to the customer; we can palletise their assets, pack them, and then deliver them to the location with it being processed.”
Mark: “One thing that’s very important, particularly right now in Australia, New Zealand, is the contact list. Can you offer that service contactless? So that basically, there is no contact between you and the folks who are delivering the equipment to you?”
Brooks: “Yeah, I mean, as long as we have access to where the equipment is located, we can operate without direct contact with our lovely customers.”
Heidi: “So how quickly can you do this? And would businesses have to schedule a month in advance or week?”
Brooks: “Yeah, I mean, typically we like to schedule 5 to 10 business days in advance, but we do get Rush jobs occasionally, where we have to turn things around on very short notice. We’ve done pickups in the shortest 24 hours. So we can be flexible. We try to accommodate.”
Heidi: “Last but far from least, how much is this all going to cost a business?”
Brooks: “Well, I hate to give the lawyers the answer, but it depends. So it’s a function of the type of services that are required. For instance, on-site data destruction is more expensive than performing that service off-site.
“Because you have to have a dedicated vehicle, and it takes a certain amount of time, the value of the condition of the equipment. So as we talked about remarketing earlier, if there is equipment with end-of-life value, it can substantially reduce the overall cost that can be used to offset the recycling charges. But it could also result in a net positive balance.
“So, customers might not spend anything. They might get a check. So really, it does depend on the type of equipment, the type of service required.
“But typically, when we work with clients, we can give them a very accurate estimate of what the costs will be upfront. So that they know how much they’re going to spend.”
Mark: “Now, I have a question, Brooks, listening to all of this. Suppose I am a particularly paranoid client. And I want to see that the data is truly gone from the machine when it’s going for disposition. How do we facilitate that? Does that mean that you erase it on-site And let me inspect it? Does it mean that I come to your facility? How do we do that in a way that allows me to feel completely comfortable and sleep?”
Brooks: “Sure will; depending on your paranoia level, we offer witness destruction that can be done in person. It could be done remotely via webcam. We also perform the wiping service; there’s an audit report that’s generated. So it will show what the result of the wipe was.”
“If you want to make sure that this gets destroyed, you can watch us load it into the shredder so that you can see the pieces ground up. But the short answer is — yes, you can witness the data destruction.”
For more questions about Iron Mountain secure IT asset disposition program, visit www.ironmtn.com.au/services/secure-it-asset-disposition and www.ironmountain.co.nz/services/secure-it-asset-disposition