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Defining What Is Meant by The Term ‘Circular Economy’, And Why Moving to a Hardware-as-a-Service Model Could Hold the Key to Improving Sustainability.
IT products have traditionally been part of a linear economy where raw materials are taken, transformed into products, and then disposed of. This has seen a creation of a vast amount of e-waste with 50 million tonnes produced globally every year. However, the circular economy aims to close the gap between consumption and disposal through sharing, leasing, repairing and refurbishing materials to keep them in circulation for as long as possible. For businesses, this is about getting the most amount of value out of the available resources and extending the life of the electronic devices that they use.
Our blog discusses some of the ways organisations are trying to ensure that equipment stays in circulation for longer. However, as we shall discuss, there is also a responsibility not to over provision and only consume as much equipment as is required by the business. Hardware-as-a-Service (HaaS) models are becoming increasingly popular as a solution to making companies IT budget stretch further and could hold the key to achieving circularity in-line with economics. With HaaS the customer pays for the services rendered by the hardware rather than purchasing the hardware outright. This allows companies to ensure that they have access to the latest technologies at affordable prices, and as the hardware remains the property of the manufacturer or service provider there is an incentive for them to extend the lifetime value of the hardware thus keeping it in circulation for longer.
Reusing Precious Materials
Around 50 to 60% of the worlds tungsten is found in laptops, along with 26% of the worlds tin, and 9% of the worlds gold. Urban mining is a concept of extracting precious metals and minerals out of technological devices and is vital to ensuring an effective circular economy action plan and lowering our CO2 emissions. However, to do this it first must be made possible to extract these materials. Vendors such as HPE are ensuring longer product lifecycles with easy upgradeability and refurbishment though modular design and simple disassembly. However, even when products have been designed and produced to be recyclable, until recently there has been a lack of facilities in place to support their reintroduction into the circular economy model. Whilst most countries have long established centres to enable the recycling of materials such as paper, glass, and plastic there has been few recycling plants able to manage the recycling of electronic devices.
Steadily companies are starting to invest in electronic recycling. In 2017 Circular Computing opened the world’s first purpose-built laptop remanufacturing factory which rebuilds carbon-neutral machines to BS 8887 standards using 99% of the original materials, while Network 2 Supplies along with Coventry University have recently developed a method of mining valuable materials within printed circuit boards. However, to achieve the European Commission targets of a fully circular economy by 2050 there needs to be considerably more advancements in the way precious materials are mined from used electronic devices.
Manufacturer Refurbished Programmes
It is not enough for just one or two companies to develop methods of remanufacturing products, and every organisation that forms our economy needs to adopt a social responsibility to sustainability. Some of the manufacturers have started to take some responsibility, and both Cisco and HPE have invested heavily in a remanufactured programme for returned products. All equipment in these programmes undergo full testing and repair to meet the same quality standards as new hardware. Data is fully wiped to ensure hardware is fully compliant with all WEEE (Waste Electrical and Electronic Equipment) regulations; and critical updates are completed with software being updated to the latest revision. Crucially equipment is kept under the same standard warranty as new hardware. Any products from these suppliers that are not reusable are harvested for components and recycled by one of their authorised recyclers.
With manufacturer refurbished products customers can enjoy the same quality of new hardware at a fraction of the cost, and it is a more environmentally friendly way of consuming new hardware. However, it is difficult for companies to build an entire estate around remanufactured hardware due to the lack of availability of certain product lines. Few manufacturers are yet to commit to establishing a 2nd user certified programme; while remanufactured technology still has a shelf life and it does not break the cycle of new hardware needing to be procured every few years. Currently all hardware reaches the end of its lifecycle and the vendor no longer supports legacy equipment with firmware updates ceasing to be made available. This essentially forces the customer to upgrade to a newer model or risks exposing themselves to threats from unsupported or outdated software.
A New Ownership Model
If we are to move towards a true circular economy, manufacturers need to move away from a business that is built around three-to-five-year upgrade cycles, and consumers need to re-evaluate the ownership model. As long as the customer owns the product there remains little incentive for the manufacturer to make a product that has a longer lifecycle. The longer the product lifecycle, the longer it will take for the customer to place another order and for the vendor to make money. Having a short product lifecycle is a model which has benefitted both producers and consumers alike and has given to a situation where smartphones and laptops are replaced every couple of years (although the situation is just as applicable to IT infrastructure) and it has led to dire consequences for the environment with e-waste now comprising of 70% of our overall toxic waste.
Until recently companies had two options in regards to their infrastructure, the first was to own the infrastructure and house it on their site, and the other was to move their IT into the cloud. However, in more recent times a third option has emerged which is the consumption-based model where the manufacturer or the service provider owns the hardware and is responsible for the maintenance. A move towards this model can cut the amount of IT equipment that is needed, bringing not only environmental benefits, but can help to solve the global supply chain issues businesses are currently facing with unprecedented shortages brought about due to chip shortages.
A Move Towards a Hardware-as-a-Service Model
A move towards a HaaS model, also known as a pay-as-you-go service ensures that the consumer always has access to the latest technology provided through a subscription-based payment option eliminating the initial outlay and reducing IT overheads. With HaaS users deploy infrastructure on their site, but still get cloud-like benefits. If users need additional capacity, it can be implemented immediately or just as easily downgraded with a lower fee being charged for less usage. The HaaS model can also make IT management much easier as the vendors can be made responsible for the guaranteed uptime, 24x7x365 maintenance and monitoring, along with patch management, advanced hardware replacement and change requests included in the monthly service fee.
Of course, the disadvantage with HaaS is that the company does not own the IT equipment outright and would be tied into a monthly/annual contract. However, with so many services now being offered in this way (most companies now have at least one Software-as-a-Service, Infrastructure-as-a-Service, or MSP contract, if not multiple) it is a business model that companies are familiar with.
Why HPE GreenLake Could Be the Answer
Nearly all IT infrastructure can now be delivered as a HaaS solution from laptops, firewalls, servers, switches, and PCs. However, HPE GreenLake is one of the most recognisable and popular HaaS solutions currently on the market and can demonstrate significant resource and energy efficiencies that it has already achieved through avoiding overprovisioning and eliminating the need for expensive technology refreshes. According to a HPE commissioned Forrester report, HPE GreenLake customers benefit from 30% capital expenditure savings due to eliminating the need for overprovisioning. In addition to the added benefits of metering, monitoring, and capacity management HPE GreenLake customers have the benefit of being able to track and adjust their usage which helps to meet their own environmental sustainability targets, while getting the latest technologies to support core business activities and driving sustainable innovation.
Steel City Consulting are proud HPE partners and have expertise in rolling out HPE GreenLake services to our expanding customer base. If you want to discover how HPE GreenLake can deliver benefits to your organisation our team would be happy to take a call or can be emailed at sales@steelcityconsulting.co.uk to discuss this service further.
Are You Thinking About a Move Towards a HaaS Model?
After reading our blog and assessing how companies can ensure materials stay in circulation for longer we would be interested in hearing about whether you are contemplating a move towards a HaaS model. If you have further questions regarding the best practices or need further information regards design or implementation our friendly advisors would be happy to take a call. Alternatively, for anyone thinking about refreshing some of their IT equipment but not quite ready to take the plunge on a pay-as-you-go service, we would advise checking out our Cisco and HPE certified remanufactured products by visiting our webstore. Here you will find hundreds of products at fantastic prices which will significantly reduce your carbon footprint.
