Renting refurbished hardware instead of buying 

The energy crisis, fear of another wave of Covid in winter, inflation – many companies are facing potentially great financial uncertainty. At the same time, there is no let-up in the pressure to digitise and consequently for investments in IT. In this situation new paths are required to shape budgets as effectively and flexibly as possible. Renting instead of buying can be one option here – including and particularly for refurbished hardware.

One possibility for reducing investment costs in hardware is using refurbished components. Used, refurbished and quality-checked equipment is partly about the half the price of new ware from manufacturers. Added to this, particularly in times of chip and supply shortages, refurbished components have one decisive advantage: they are already on the market and are available immediately.

A second possibility for making investments feasible is to rent or lease investment goods instead of buying them. It’s already common practice to use these finance solutions for cars – whether in business or for private use. In the IT sector people are still far more cautious in this respect. 

The advantage of financing is that IT departments have more freedom of action and at the same time, keep more control over their budgets. Investments can be implemented quickly instead of putting them on ice for cost reasons. It’s possible to expand the system landscape promptly. As a result, IT departments can react quickly to changed challenges and ensure the necessary performance. At the same time, financing offers budgetary control over the entire term of the contract and preserves the company’s credit line and equity ratio thanks to equal monthly instalments.  

A treble of financial benefits

Previously, leasing, rental and hire purchase were often only used for new ware, if at all. But it’s also possible to finance refurbished hardware. As a result, companies can benefit financially twice: firstly, through the much lower price for the refurbished equipment and secondly, thanks to flexible financing. 

There is even a third possible saving, which should not be underestimated – maintenance. This is often viewed as a stumbling block for using refurbished hardware. However, providers of third-party maintenance (TPM) also take over the maintenance of used components at a very high quality, using demanding SLAs and independently of the manufacturers of the equipment. The conditions of TPM service providers are often significantly more favourable than those of manufacturers’ maintenance agreements. The analysts from Gartner assess the potential savings that can be made through TPM in comparison with manufacturer maintenance to be up to 70 per cent. 

Some TPM service providers offer the procurement, financing, installation and maintenance of refurbished components from one source. As a result, the financing of an overall concept will become the financially sustainable operation of a system landscape.

It also makes ecological sense

But refurbished hardware and financing solutions are not just financially sustainable. Every year, tonnes of flawlessly functioning hardware are declared to be electronic waste and are dumped in landfill or incinerated. Sometimes, this can cause harmful substances to get into the air or ground water. The European market leader in third-party maintenance, Technogroup, which is part of the Evernex Group, has found out that about 15 per cent of all equipment handed over to Evernex as IT waste can be reused. This amounts to more than 50,000 components every year, which can be recycled into spare parts stocks and installed once again. 

In addition, the second life of refurbished components also reduces CO2 emissions. Using hardware again means the emissions caused by an entire generation of equipment that does not even have to be produced will not be generated. This relates to the contaminants that would be created through extracting raw materials, during the manufacturing of the products and upstream products, as well as during their transport. Renting hardware is also ecologically sustainable because companies use equipment that already exists instead of ordering new ware and disposing of it after use.

Consequently, financing refurbished hardware offers a combination of various ecologically and financially sustainable benefits that enable companies to get the best out of their IT budgets, even in financially demanding times.

Author: Arnd Krämer

Source:
IT-Mittelstand 22.06.2022, www.it-zoom.de

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