Gartner Says PC Disposal Costs Must Be Considered in Total Cost of Ownership
STAMFORD, CONN., September 29, 2003 — When disposing of obsolete and surplus IT equipment, most enterprises are unaware that the various costs associated with the disposal usually exceed the proceeds from the sale, according to a new report by Gartner, Inc. (NYSE: IT and ITB).
The disposal costs for IT equipment, especially PCs, must be considered as a line item when estimating PC total cost of ownership (TCO). On average, enterprises selling PCs after three years of ownership receive 3 percent to 5 percent of the original equipment price, but will still incur net disposal costs of between $85 and $136 per PC, depending on the disposal method, according to the report.
"Sale proceeds vary based on the quantity, method, vintage and condition of the equipment being sold. However, an important consideration is that PCs sold after four years have little economic value and still incur disposal costs," said Frances O'Brien, research director for Gartner. "When enterprises evaluate disposal options they must consider the per-PC costs, the administrative overhead of the disposal method selected, and the legal and economic risks to the enterprise for improper disposal."
Per-PC costs include disconnecting the computer from the network, backing up and sanitizing the hard drives, and, in some cases, reloading the operating system, testing the equipment and processing payments. Administrative costs include paperwork, packing, shipping and handling.
For some enterprises, however, the cost is much higher, because of failing to properly dispose of PCs or to eliminate confidential data residing on the drives. "Many enterprises have paid a high price in costs, regulatory fines, bad publicity and even litigation when their PCs turned up in landfills or third-world countries, or when confidential data was recovered from hard drives that had not been properly sanitized," said O'Brien. "Nowhere is it specified that if an enterprise disposes its PCs in an environmentally unsafe manner that a certain amount of money per PC will charged, but some enterprises claim that they have paid as much as $200,000 in fines."
More information is available in the Gartner Research Note PC Disposal: TCO's Last Surprise. The report examines the various PC disposal options and contains approximate cost figures for each method. The report is available on Gartner's Web site.
Gartner analysts will provide additional analysis on TCO issues during Gartner Symposium/ITxpo 2003, which will be held October 19-24 in Orlando, Florida.
Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more details or to register for Gartner Symposium/ITxpo 2003,visit www.gartner.com/us/symposium/us or call 1-800-778-1997. Members of the media can register for the event by contacting Maria DiMasi at +1-212-699-2734 or e-mailing GartnerEvents@middleberg.com.
About Gartner:
Gartner, Inc. is the leading provider of
research and analysis on the global information technology industry. Gartner serves more
than 10,000 clients, including chief information officers and other senior IT executives
in corporations and government agencies, as well as technology companies and the
investment community. The Company focuses on delivering objective, in-depth analysis
and actionable advice to enable clients to make more informed business and technology
decisions. The Company's businesses consist of Gartner Intelligence, research and
events for IT professionals; Gartner Executive Programs, membership programs and peer
networking services; and Gartner Consulting, customized engagements with a specific
emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in
Stamford, Connecticut, and has 3,700 associates, including more than 1,000 research
analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
