by Mario Correa, April 2007
Regardless of their industry or the complexity of their IT infrastructure, large businesses around the world all face the same challenge: how to clear out all of the old equipment laying around offices and piling up in warehouses.
Luckily, the answer is simple. You see, HP doesn't just create many of the world's best-selling technology products it does something equally important: HP takes them away! Here's how HP Financial Services provides one of HP's take back services.
Commercial and enterprise customers can lease IT assets from HP Financial Services (HPFS), a wholly-owned subsidiary of HP, rather than purchasing the technology outright. When they're done using the equipment, HPFS takes it back for refurbishment and resale, or manages its disposition in an environmentally-responsible fashion.
According to Irv Rothman, President and CEO of HPFS, it all adds up to a "no hassle" option that's proven increasingly attractive to many customers.
"It really comes down to a business calculation," he says. "Over the long-haul, it may be more expensive for a company to own IT assets and assume the costs associated with their disposal, than it is for them to lease the assets and leave disposition to HPFS."
And contrary to popular belief, says Rothman, equipment leasing isn't just for companies looking to stretch their purchasing power. Rather, it's for any company that wants to more effectively align expenses with the expected use of the equipment and save on the full "lifecycle cost" of IT investments.
"The cost of any IT asset is far more than its purchase price," he notes. "It's the total cost of buying, operating, maintaining and then appropriately disposing of that asset at the end of its useful life. When these are taken as a whole, equipment leasing can be a very cost-effective, smart business decision."
That's especially true, says Rothman, when companies consider the fact that disposing of IT assets in an environmentally-responsible fashion can be an expensive and technically complex undertaking.
"Disposition of IT equipment is not a simple process," he notes. "Start with data security how do you minimize the risk of loss of proprietary data stored on the hard drives of PCs or servers? Add in the environmental concerns, and it's quickly apparent this is an area that requires care and detailed knowledge. For most companies it doesn't make sense to develop the technical know-how in-house.
"When a company leases their equipment from us," Rothman adds, "they can rely on our expertise with asset disposition."
But what if a company has IT assets that it hasn't leased from HP? How does it affordably dispose of its older equipment then?
Easy: It's called "asset recovery services," and it's another popular offering from HP Financial Services.
"We help companies manage IT assets even when that equipment wasn't made by HP," says Jim O'Grady, HPFS' Americas Technology Value Solutions leader. "Simply put we've got the expertise to do it right, and a growing number of companies recognize it's smart business to rely on us."
So many, in fact, that HPFS took in roughly one million units last year alone. Enough monitors, set one atop the other, to equal the height of 250 Eiffel Towers. And enough notebook PCs to cover 3-1/2 Olympic-size swimming pools.
In fact, remarketing older assets is a key part of HP Financial Services' business.
"Remarketing started as a natural extension of our leasing business," O'Grady says. "Over time, it's grown beyond handling equipment coming back to us off-lease; in addition, we now purchase and remarket older IT assets having remaining value from customers as they upgrade to new technology solutions. In other words, we help customers manage the risk of dealing with unneeded IT equipment and often put dollars back in their pockets.
"It's a little like 'cash in the attic,' where you've got things stored away that have tremendous value that you're not even aware of," says O'Grady. "Except in this case, it's piled up in a company's warehouse somewhere, taking up room and losing that value day by day."
HPFS helps companies mine that hidden cash, says O'Grady, helping them offset the cost of new IT acquisitions often significantly.
"Many of our customers are shocked by how much value is still in their older equipment," he notes. "Having us refurbish and resell that equipment often brings in income for them that they had no expectation of recouping."
But what if a company's equipment is so old, or in such bad shape, that it no longer has any useful life left?
Not a problem, says O'Grady. "In those cases, HPFS will mine the equipment for any useful parts and then manage the disposition of the remainder in accordance with applicable environmental regulations. From the customer's perspective, it's no fuss, no mess."
In addition, notes O'Grady, HPFS can help customers comply with privacy laws.
"Companies are rightly concerned about protecting proprietary or customer data," he says. "We use industry-standard software and processes to overwrite drives and help minimize the risk of loss of proprietary information that may reside on drives or in memory. If customers prefer, we can apply even more stringent procedures down to and including destruction of hard drives."
So let's say a company's done its spring cleaning, gotten some unexpected cash for its older equipment, and is ready to invest in some additional technology. Can it keep saving money, by say, loading up on some pre-owned HP equipment?
Absolutely, says O'Grady. "One of the things we're finding is that companies around the world aren't always looking to purchase brand new technology in every instance. Sometimes they have a legacy environment they need to maintain, or they're preparing for disaster recovery by stocking up on existing systems."
Purchasing, leasing or renting pre-owned HP equipment, he says, allows these companies to make those investments affordably.
"We recognize that not every company in every corner of the world upgrades to new technology on the exact same timeframe," says O'Grady, "and we want to give them pre-owned options that meet their particular needs." Without these options, he notes, those customers would likely just keep using their old technology and that isn't good for them, or for HP.
"Just because a company likes a bargain doesn't mean it shouldn't get great technology," he says. "And that's what we're here to provide."