We hear a lot about the concept of a Circular Economy, mostly driven from the PC, and in HP’s case, the printer side of the major IT vendors. The concept is to continually move to approach maximum reuse of components and minimize waste, particularly toxic waste.
The major OEMs are chasing this concept because buyers are demanding it, and as millennials move into the workforce, they are bringing the demand for more sustainable approaches with them. The major vendors have indicated that over $1B in sales can be attributed to their sustainability efforts.
But on the glass house side, there has been minimal progress after limited component recovery. I met with ITRenew this week, and ITRenew presented a program that goes far further than any other I’ve covered and focuses primarily on storage and server classes of products in the HPC space. I think it could represent the next big step in sustainability. You can read in detail about their argument for this approach here, but I’ll summarize it below.
The Coming Landfill Problem
ITRenew estimates that the top 5 Hyperscale companies will be decommissioning servers at an increasing speed and at a rate that will eventually exceed the new servers OEMs are selling. These firms chase technology, but there is also a shift between centralized and distributed data centers as the technology moves towards the edge.
Typically these servers and racks would be taken out of service and stripped down for parts, with a substantial portion being discarded and placed in landfills. These servers are still viable; they need to be updated and re-certified to be deployed by other companies and, potentially, in other countries.
Recertifying And Reselling HPC Computers
The program that ITRenew is rolling out intercepts these servers, strips and updates them, and then certifies them for reuse. One of the components that do get replaced is the storage subsystem as many, if not most, companies and government accounts won’t accept wiped drives and require new. The resulting server rack is then resold at around 50% of its initial price.
While the rack is no longer a top performer, its capacity and performance remain competitive with lower-performing new products. The result still prices out reasonably under these new offerings. Besides, these servers are entirely burned in, so, except for any replaced components, the reliability of the result should be, in some cases, better than brand new offerings in its new class may be able to provide.
Now this solution doesn’t work for every Hyperscale implementation. Companies like Google have custom hardware that can’t cost-effectively be recycled into a new offering. However, assuming this recycling effort takes off, it should reduce the interest in custom server hardware due to higher TCO because of a less significant recycling component. As a result, Google will have a more massive adverse environmental impact long term and may result in Google, and others, rethinking this approach.
These recycled servers wouldn’t have to be sold to others either, and Hyperscale companies also require regular servers. This approach suggests that this recycling process could be implemented internally, extending these servers’ useful life by three or more years after they likely have been fully depreciated.
Wrapping Up: Evolution
The emphasis on social responsibility and green efforts is only increasing. While the initial focus was on personal devices like PCs and Printers, this effort will eventually move to servers. The most financially viable is the Hyperscale servers, which are very expensive and have a relatively short service life but are still competitive concerning performance with newer servers after that initial service life. This economic advantage created an opportunity for ITRenew to create a cost-effective recycling offering.
But, I expect the OEMs will eventually see this as an opportunity to differentiate on sustainability. Larger enterprises with Hyperscale will realize they can do this internally with potentially even more savings. I expect this will eventually impact how Hyperscale servers are built that should cascade down to lower-cost servers as this recycling concept moves from an economic driver to an even stronger sustainability argument.
As we focus on sustainability, future products in every enterprise segment will likely increasingly be differentiated by their recycling capability.
In short, the industry is going green, and those that miss this meeting may find they are on the wrong side of this trend.
