Tech Watch: Desktop virtualization movement creeping into customer sites

January 22, 2007
IT vendors go green
A focus on energy efficiency, recycling, refurbishment and other environmental initiatives is increasingly seen as good business.
By Heather Clancy
Whether or not you believe in global warming, get used to the color green.

Jennifer Shine, president of eMazzanti Technologies, Hoboken, N.J., already has. Growing public awareness around environmental issues is ready fuel for her sales and marketing pitches for things such as managed services, thin-client computing solutions and energy-efficient firewalls, Shine said.

When she saw the Al Gore documentary “An Inconvenient Truth,” an (energy-efficient) light bulb went on in her head. Now, she intends to use concerns over global warming and other environmental issues to justify a rebranding of her company.

“I’m actually writing a pamphlet for all my customers about how they can use technology to better their relationship with the environment,” Shine said.

The good news is that she’s about to have a whole lot of source material. In the coming weeks and months, companies across the high-tech channel will be talking up energy efficiency, recycling, refurbishment and other environmental initiatives as they ride a wave of high-profile publicity and get ahead of what could become a dizzying number of new state laws regulating aging technology.

Solution providers, in turn, can use these activities to write their own scripts for green dialogues that could translate into that other green stuffmoney.

This week, Ingram Micro, in partnership with asset disposition giant Intechra, will crank up its existing recycling services through the Ingram Micro Outlet.

Under the new Ingram Micro service, VARs can hand over qualified used ink and laser printer cartridges, fax cartridges and cellular phones, receiving cash credits that they can apply either to the price of new products or use to help get their customers a price break.

The old products are refreshed, refurbished and remarketed as appropriate. Meanwhile, solution providers can be assured that the items have been disposed of and handled legally and ethically.

IBM, meanwhile, is launching a pilot program with a leading global supply chain company to educate resellers on green issues and how to apply them to their sales pitches.

This follows its move to establish a 3 percent referral fee for business partners sending equipment to its technology asset recovery facilities. Samsung Electronics America, among other peripheral companies, will launch free toner recycling this quarter.

“Time makes a believer out of you,” said Clark Aikers, vice chairman of Nashville, Tenn.-based Intechra, which has six processing plants around the United States. “We are seeing more and more companies wake up every day that don’t want to take the risk associated with dumping tech equipment.”

Those risks range from state legislation that has banned computers and other tech equipment from landfills to privacy laws dictating how data needs to be properly expunged before a system is redeployed or destroyed.

“There is a balance between how you get your client a return on investment as well as keep them compliant,” said Paul Baum, CEO of PlanITROI, Denville, N.J., which works with Panasonic Computer Solutions Co. as its “End of Life” partner for products including Panasonic’s Toughbooks.

Peter Sierra, CEO of White Palms Technology, an asset disposition company in Hohokus, N.J., said he thinks the IT community should make it more publicly known that the small and midsize VAR can offer services like his to customers. He’s doing his part by actively recruiting resellers.

“I find that I am getting a lot of reception to this from VARs that are not necessarily politically correct or the environmental type,” he said.

For Pete Busam, CEO of Decisive Business Systems, Pennsauken, N.J., proper disposal is part of every deal, a service for which he pays a local partner an average of $7 to $8 per unit (or about $4 for a stand-alone hard drive). Current programs offered by his large vendor partners, Busam said, are too expensive for him to use.

Dan Lupardus, sales manager at Futureware, a VAR and custom-system builder in Omaha, Neb., uses the Ingram Micro Outlet and discusses environmentally aware disposal and life-cycle management with all of his customers, although he almost always has to introduce the topic.

“They know it’s wrong to throw it away, they just don’t have an avenue to do it [properly],” he said. “Recycling is a great way to get your foot in the door.”

An Increasing Obligation

One challenge solution providers will face is the fact that many companies, especially smaller ones, have failed to budget for disposal or disposition, said Paul Brundage, senior vice president of AnythingIT, a recovery outfit in Fort Lee, N.J., that works in partnership with Tech Data.

“In the future, CIOs would like to bundle recycling solutions into the cost of the procurement,” he said.

Denise Miles, asset recovery administrator at CyberCore Technologies, Elk Ridge, Md., regularly uses a service from AnythingIT called RecycleTomorrow to ensure future disposal of anything from PCs to monitors to servers to routers.

When equipment covered by RecycleTomorrow is taken out of service, it is sent to AnythingIT for processing, disposal or redeployment. “It’s helping us because we don’t have to pay an additional fee for recycling. It takes the obligation off,” Miles said.

And that obligation is only likely to increase. Gartner estimates 925 million PCs will be replaced worldwide between 2006 and 2010. And that doesn’t include servers, storage equipment or cellular phones.

Hewlett-Packard’s asset recovery facility in Andover, Mass., will handle an estimated 600,000 systems this year. While most of these units come off lease, HP also is processing more hardware for its resellers, said Jim O’Grady, director of technology value solutions for HP Financial Services.

He says approximately 94 percent of the systems flowing through the facility could be remarketed and sees the channel playing a role in building volume.

There has been little federal legislation affecting that volume, but the actions of several states have made solution providers sit up and take notice. In California, for example, the state collects a per-device fee for future recycling.

The state of Washington will make vendors responsible for recycling, and it has enacted laws providing financial breaks for renewable energy projects. Minnesota, Maine, Massachusetts and New Jersey also have passed laws related to disposal, and other states are poised to follow.

“Awareness is emerging, and what’s driving that is legislation,” O’Grady said. “But this makes things more complex to manage. You have to solve that problem for them before you can sell them the new gear. VARs that understand that will be seeking vendors who can help them find value for the old against the cost of new acquisition.”

Over the past three years, IBM’s asset disposition operation has taken in and reused technology from more than 1.9 million machines. To grasp the magnitude of this task, consider that the amount of steel it handled was more than three times the amount used to construct the Eiffel Tower.

Monitor companies, including Samsung, ViewSonic and NEC Display Solutions, are in on the action too, with extensive trade-in programs and plans to focus more this year on how resellers can participate.

Each working monitor collected by ViewSonic, for example, could be worth $10, an amount that could add up in larger accounts, said Jeff Volpe, vice president of marketing. The Walnut, Calif., company, which works with AnythingIT and E-World Recyclers, Vista, Calif., actually offers free recycling whenever an extended warranty or exchange service is purchased by a VAR.

“The channel, we feel, is actually ahead of everybody else,” said Richard Atanus, vice president of product development in charge of environmental policies at NEC, Schaumburg, Ill.

The vendor works closely with Computers for Schools, and more than 95 percent of its displays carry the current highest rating for a stand-alone monitor (Silver) under the Electronic Product Environmental Assessment Tool, used by government agencies and companies to evaluate technology. “Resellers don’t have time to worry about whether the product is OK. We take care of that for them.”

Conservation, too Aside from recycling concerns, the other elephant in the green forest is energy conservation. The channel should get set for a barrage of initiatives aimed at reducing power consumption, especially products for the data center. These, in turn, could be sales tools for solution providers.

Keying in on the fact that up to 50 percent of the energy used for a data center often goes to keeping temperatures from climbing, HP touts its Dynamic Smart Cooling technology.

IBM, meanwhile, trumpets its Cool Blue energy management strategy. Other vendors including Advanced Micro Devices, APC and Rackable Systems are distributing white papers detailing the energy issue and more efficient design approaches.

Kenneth Yanneck, president of IP Logic, a CRN Fast Growth 100 infrastructure VAR in Latham, N.Y., said one of his clients, a big MSP, recently saved $80,000 in electrical costs alone simply by opting for a different type of server design in its data center. “Even moderately small environments could benefit,” he said. “The dollars will smack you in the face.”

Invision, a Microsoft Gold Certified MSP in Commack, N.Y., has taken matters into its own hands by investing in and advising the Advanced Energy Research and Technology Center in Stony Brook, N.Y.

The investors, which include local universities, utilities and the private sector, are focused on clean energy alternatives. For Invision CEO Tyler Roye, this is as much a sound business strategy as it is a social responsibility.

“In some cases, we have to be more competitive to make up for the impact of our power costs,” he said. “We’re looking at other markets across the country where we can buy power more affordably.”

Still, many VARs feel the hardware community is missing an opportunity to work more closely with the channel on publicizing aspects of their technology that can save energy or are more sound when it comes to materials.

EMazzanti’s Shine cited WatchGuard Technologies, Seattle, saying it was one of the first to offer a firewall compliant with the European Union directive restricting the use of certain hazardous substances, yet it never really educated the channel. EMazzanti bridged the gap on its own.

“The customers that we told out there about this vs. the comparable product from another vendor they were considering, for them it was a key selling point,” Shine said.

But only because this VAR isn’t colorblind.