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Business Services Industry

Out With The Old

Entrepreneur, April, 2001 by Mike Hogan

You can't just throw your old PCs away--for one thing, they contain harmful chemicals. So how do you get rid of them?

Old PCs don't die, and they don't fade away, either. The average PC will run almost forever, and the harmful chemicals inside it will survive in your local landfill for even longer.

How many long-lived-but-obsolete computers is your company moving around among staffers? There's definitely a point of diminishing returns in holding on to PCs past their prime, as well as hidden costs in just about any disposal method you choose. In fact, in some cases, it may cost you more to move PCs down the corporate ladder than it would to just purchase cheap new machines every few years. But either way, sooner or later, you'll have to get rid of old PCs. So how do you do it?

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Don't think you can just toss them in the dumpster--remember those dangerous chemicals. And sure, selling them to employees or a PC broker or giving them to charity are all viable options, but they all have costs attached--many of which may surprise you. It's a good idea to have an exit strategy for your old hardware--and it should be in place long before the intrinsic value of your PCs hits zero.

Complete depreciation is often here before you know it, but there's good news in that respect: After years of decline, PC life expectancies are in an upturn, says IDC analyst Alan Promisel. The average middle-of-the-road PC now has a useful life of about three years; a high-end desktop, about four years. What's changed is that Microsoft has slowed down the spin on the Windows upgrade wheel, and the whole software industry has followed suit, cutting back the rate at which incompatibilities occur.

Longer software lifecycles mean you don't need to buy new hardware as often. In fact, you can probably squeeze an additional six months or so out of your company's desktops. But be careful: Nurse an old PC along for too long, and productivity suffers--for low-level staffers as well as managers. Worker efficiency declines along with equipment efficiency, so when software takes longer to load, screens take longer to redraw and incompatibilities start to occur, memory upgrades need to be deployed.

COSTS PLUS

Market analysts tell us we're about to reach the point where one PC is retired for every new one purchased. Where do old PCs go?

Unfortunately, only about 6 percent of them were being recycled in 1998, according to the nonprofit Silicon Valley Toxics Coalition (SVTC). And that's too bad, because 90 percent of computer contents can be reused.

A widely quoted Carnegie Mellon University study projects that we're on our way to retiring 325 million PCs between 1985 and 2005. An increasing number are being recycled, and even more are sitting in company supply rooms, but Carnegie Mellon estimates 55 million are headed for landfills--enough to cover acre 4,000 feet deep.

Some think that's what landfills are for, but old PCs have chlorinated and brominated substances, Poly Chlorinated Biphenyls (PCBs) and Poly Vinyl Chloride (PVC), heavy metals, gases, acids and plastic additives--and that's just for starters. (For a complete list, see the SVTC Web site at www.svtc.org/cleancc/pubs/sayno.htm#clean.htm.) All those chemicals have incredibly long half-lives.

You want your new house sitting on top of this stuff? Not to mention, the EPA will be all over you if you're discovered throwing PCs in the trash. And according to IDC's analysis of a tracking survey, that disposal method costs roughly $217 per PC anyway.

In general, a lot of PC disposal costs are realized in soft dollars, and a certain amount of those are fixed. IDC says it will cost companies at least $150 for every PC taken out of service. First, there's the labor involved in physically removing a system and its network components, disconnecting peripherals and scrubbing the hard drive of software, passwords and sensitive company files. Then there's the downtime for employees during the move. After that, your costs will vary depending on how you choose to dispose of the old PC and may include payment for things like testing and repair or, in many cases, contractual or other legal costs.

The traditional method of PC disposal, especially for smaller organizations, is to pass hardware down the corporate ladder. But that's your most expensive option, according to IDC. It costs $397 to de-install and re-install a PC. And you haven't even solved the problem of declining capital equipment efficiency; you've only moved it to a different part of your organization and temporarily postponed the day when you have to incur disposal costs.

Another popular option is to sell old company PCs to staff. IDC says your net out-of-pocket per PC is $272 if you can sell it to an employee for $100, and $119 if you sell it to a third-party broker for $200. (Remember, costs vary among disposal options.) The good news is, the PC is gone. But in both cases, you have to sell the PC before its value reaches zero. And those three years for a midrange PC and four years for a high-end box go by quickly.

Business Services Industry

Out With The Old

Entrepreneur, April, 2001 by Mike Hogan

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