Old PCs a Growing IT Headache

Those new notebook computers you bought for the sales department are
working great, but what to do with the dozens of old ones they turned in?

If you think that question has an easy answer, think again. Many of the
once-standard options for disposing of old computers include considerable
risk, both financially and legally.

First off, forget about tossing systems in a dumpster. Dead computers
need to be disposed of in an environmentally correct manner or there could
be legal consequences. Donating older systems is an option, but it is not as
viable as it was in past years.

“A lot of companies used to turn to auction sites and donations, but it’s
becoming more difficult to make donations when you have licensed software on
the computers and sensitive data,” Hewlett-Packard executive Jim O’Grady told

“And some institutions, like schools, are demanding newer systems so they’ll have the latest technology,” he added.

O’Grady is director of HP’s Financial Services Technology Renewal Center
in Andover, Mass. The center is part of HP’s huge financial services operation, a global, $8 billion enterprise that includes

Like other large IT system providers, such as IBM  and Dell,  HP  has a huge stake in helping customers manage their assets,
which can include both the sale and disposal of older systems.

On a yearly basis, O’Grady said HP helps companies move over 1.5 million systems globally. One of his biggest customers disposes of about 40,000 units a year, he said.

“Dealing with older PCs is becoming a bigger part of the ever-growing
area known as IT infrastructure management,” Michael Dortch, analyst with
Robert Frances Group, told internetnews.com.

“On the one hand, if you don’t do a good job managing end-of-life PCs,
the best case is you overspent. But the worst case includes confidential
information leaking out to bad guys.”

Dortch said while all the big computer makers have programs to tackle the
issue of older computers (Sun, for example, appointed a vice president of eco-responsibility earlier this
year), he gives specific kudos to some of the work HP has done.

“I’ve been to HP’s recycling facility in Roseville, Calif. facility and
its damned impressive,” said Dortch. He notes HP is working with a mining
company that figured out it can be cheaper to extract precious metals from
old computers than go digging in the earth for them.

Of course, not all of a company’s older PCs are ready for the scrap heap,
even if they’re being replaced with newer models. There is a ready market
for name brand used PCs, but getting a decent return can largely be a matter
of timing.

“You aren’t going to get anything for an old Pentium-based PC that can’t
run newer software,” said Dortch. “It can be hard to find the appropriate
older software that can work and even if you do, getting support can be an

Many older systems will start looking a bit creaky next year. In early
2007, Microsoft’s delivery of its next-generation operating system, Vista,
will be in full force and many older PCs won’t have the specs to run it

“Vista’s one of those events that cause a refresh cycle,” said O’Grady.
“We see the newer, 64-bit and dual-core systems ready for Vista and the
degradation of older assets will follow.”

O’Grady said the key for companies wanting to get the most value for
older PCs is to take action before newer technology has a big impact.

HP works with third party companies who can refurbish older PCs, make
sure the data is completely wiped clean and resell them.

While companies can deal directly with auction houses and used computer
dealers, O’Grady claims it can be a risky proposition.

“We recommend a revenue share, typically a 70/30 percent revenue split to
the customer in a very transparent process,” said O’Grady.

“These other companies can quote a higher price, but once they have your
computers hostage, they can say all sorts of things about the condition to
drive the price down that they’ll pay. We don’t play those games.”

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