In addition, many organizations lack the ability to track assets throughout their lifecycles and, therefore, have no visibility into when assets are accumulating. So three computers in the corner of the warehouse become 12 and then 30 and, before you know it, you have hundreds of computers sitting idle. Industry research puts the number of unused PCs in warehouses, storerooms and closets at 150 million.

And those computers aren’t just sitting idle—they are busy draining your budget.

International Data Corporation estimates that unused computer equipment is stored for up to three years at a cost of about $360 per machine. And that doesn’t include the cost of acquiring new technology that could be deferred by repurposing idle equipment, or the huge security liability associated with having unsecured equipment sitting around subject to loss or theft. According to new research from the Ponemon Institute, the average security breach costs companies $6.3 million per incident.

The economics of asset management already heavily favor transforming stockpiles of unused equipment into a lean inventory of refurbished systems that can be quickly redeployed in other areas of the organization, extending equipment life and reducing IT procurement costs.

Now, the Microsoft Authorized Refurbisher (MAR) program makes those economics even more attractive.

The MAR program allows large refurbishers to deliver preinstalled Windows XP software licenses on refurbished PCs sold in the commercial market, at a substantial savings over retail. MAR has the potential to greatly enhance the value of idle equipment while also making it more feasible for companies to acquire used equipment to defer new equipment purchases. Redemtech is one of only two companies to have earned the designation of Microsoft Authorized Refurbisher at program launch in November 2007.

Selling Refurbished Computers
If you have equipment sitting idle in your organization that can’t be repurposed internally, Redemtech’s role as a MAR can lead to increased resale value for those systems. Redemtech’s professional refurbishing services, which now include the Windows XP operating system pre-installed at a discounted price, can generate a return on remarketed equipment that is as much as 40 percent above fair market value. And, because Redemtech employs a consignment model, our clients receive a majority share of the higher return.

With demand for used computers projected to outpace supply worldwide, according to Gartner, and the value of Windows XP machines remaining high as companies work to manage the timing of their transition to Vista, now is an excellent time to bring used equipment to the commercial market.

Buying Refurbished Computers
Processor manufacturers continue to create faster, more powerful chips. But, most desktop applications don’t require the performance of the newest processors. They can operate effectively on PCs manufactured three or four years ago. That creates opportunities for organizations to supplement redeployment programs and new equipment purchases with used equipment. In fact, used equipment may be preferred over new for companies:

• With tight budgets that don’t support purchasing new
• Where the life of the Windows XP platform is being extended to support proprietary applications that won’t run under Vista or on newer hardware platforms
• Needing to support special projects, spot needs or during temporary expansions
• Seeking to consolidate models and reduce use of systems with lower reliability and higher maintenance costs

Reconditioned equipment can be especially effective when it is used to supplement redeployment efforts. For example, if you need 20 systems and have 10 in your inventory, you may be able to acquire used systems that match the age and model of the equipment in your inventory, reducing procurement and maintenance costs. Redemtech works with clients to optimize existing assets by harvesting parts from equipment that cannot be cost-effectively refurbished and using those parts to repair and upgrade incomplete or broken systems.

Here is one example of how effective that strategy can be.

There is increasing demand from the non-profit community for used equipment for much the same reason this equipment is being redeployed within corporations—it is still highly functional. But the supply of these systems, which have historically come out of large corporations following technology refresh programs, is decreasing as companies become more sensitive to data security and e-waste liabilities.

Redemtech offers a number of programs to allay those concerns and those programs have been strengthened by our participation in the Community Microsoft Authorized Refurbisher (CMAR) program, an extension of the MAR program that provides low-cost software licenses to refurbishers that supply PCs to charities, nonprofits and educational institutions.

Working in concert with Redemtech’s certified data destruction services and extended end of life service, which provides free asset recovery and recycling of computers donated to nonprofits, CMAR can help increase the flow of usable technology to non-profit organizations. Redemtech is able to administer donation fulfillment—directly or through its alliance with TechSoup, a one-stop resource to the nonprofit community for technology resources—and perform donation services at 40 percent of the cost estimated by Gartner.

That savings, along with the higher resale returns generated by Redemtech, gives our clients the option of using remarketing revenue to fund charitable donations. For example, one Redemtech client was able to donate 2,100 laptop computers to a local charity at no cost by using the remarketing proceeds to cover the costs of preparing the laptops for donation.

Microsoft is doing its part to extend equipment lifecycles through the MAR program. The demand is there, both in the aftermarket and in the non-profit community, and the longer you wait to take action, the more your equipment diminishes in value.

Redemtech can help you implement a program to eliminate stockpiles of unused equipment and optimize the value of these assets through a combination of reuse, remarketing, and donation.

To learn more about MAR, read this issue’s Guest Column by Bill Benton, business development manager with Microsoft Corp.’s U.S. OEM division.

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