• Robust IT spend
• Parity between desktop and notebook PC lifecycles
• Overall equipment lifecycles remain stable
• Rudimentary asset management automation
• Apathy towards IT disposal legislation
• General underestimation of IT disposal costs
A poll of UK IT managers and IT directors conducted by Datamonitor in association with Lombard GATX Technology has found that desktop and notebook computer asset lifecycles are now almost the same. The typical corporate IT asset base appears to be maintaining a stable lifecycle. It also found that most firms still relied on low tech asset management registers to track equipment.
Disposal and recycling costs and obligations were significantly underestimated. Only half of those polled were aware of important new legislation that will affect their responsibilities to recycle kit. Three quarters of those polled thought a PC cost under £50 to dispose of, a figure that contradicts almost all established studies on the cost of IT disposal.
About those polled – and their IT budgets
Datamonitor polled a sample of 150 firms from across the UK during July and August 2004. 45 per cent of the sample had 500 to 5000 PCs installed.
71 per cent of sites said the size of their 2004 IT budget was the same or higher than 2003. 35 per cent of IT spend was focused on the desktop. On average, 10 per cent of the IT budget this year was expected to be allocated to storage, almost as large as the entire software spend (at 12 per cent).
Notebook and desktop PC lifecycles are now almost identical
The study found that companies are no longer seeing any difference in the asset life of notebook computers versus desktop systems. The average desktop PC lifecycle was cited as 41 months (around three and a half years). Notebook computers were expected to have a very similar service life, with an average 40 month lifespan. Server lifecycles average around 47 months (just under four years). Voice and data assets were expected to last much longer, with the poll citing the average lifecycle for such equipment at 66 months (5.5 years). The view of the life expectancy of key IT assets has changed little in recent years for the vast majority (71 per cent) of the sample.
“This is a testimony to the improved durability of notebook computers, and a reflection of the strong residual values they continue to achieve in the market,” said Malcolm Plunkett, asset management director at Lombard GATX Technology.
Low tech asset tracking remains commonplace
However, asset management techniques remain extremely low tech, with a full 60 per cent of those polled still managing their IT fleets using simple manual asset registers. Only 38 per cent use special asset management software. Larger firms (those with a turnover above £150 million) have got to grips with asset management more convincingly – 50 per cent of large companies use auditing software. 11 per cent of those polled use barcoding. Just 1 per cent were using RFID in this context at present.
“Despite years of debate about the total cost of ownership (TCO) of IT assets, it was surprising to see few firms have used asset management software tools,” commented Lombard’s Plunkett. “In an era when most equipment can be tracked over the network, it would seem many IT managers continue auditing without such aids.”
Apathy towards disposal and recycling legislation
Those polled showed apathy towards new and upcoming asset disposal and recycling legislation. Only 52 per cent knew about the EU’s WEEE Directive, which is close to becoming law in the UK and will place significant responsibility on all IT departments to implement proper recycling policies.
End of life disposal costs widely underestimated
45 per cent of those polled outsource the disposal of their end of life IT assets to a specialist company. The proportion increases to 54 per cent among large corporations and 63 per cent of mid-sized firms. 32 per cent of all those questioned give at least a portion of their equipment to charity.
Most firms seriously underestimate the cost of disposal of PCs, in comparison to figures based on independent studies. Over half of those polled reckoned a PC cost less than £25 to dispose of. A widely quoted study by Gartner cites the cost of disposal at between $85 and $136 (£50 to £80) per PC depending on the disposal method. Three quarters of Datamonitor’s interviewees assumed a figure below this range.
According to Lombard’s Plunkett, “All our experience working on disposal projects support analyst assertions of higher costs associated with issues such as decommissioning, data erasure, secure shipment, remarketing and recycling plus the tracking and administration of the process.”
About Lombard GATX Technology (www.lombardgatx.co.uk)
Lombard GATX Technology is a joint venture between Lombard and GATX.
Lombard GATX Technology is a dedicated technology leasing and asset management organisation providing a range of asset management and leasing solutions to corporates.
Lombard is a member of The Royal Bank of Scotland Group.
GATX Corporation is a specialised finance and leasing company combining asset knowledge and services, structuring expertise, partnering and risk capital to serve customers and partners worldwide.
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