Salvaging IT equipment is good news
- 17 October, 2007 12:50
Why would a business that focussed on technology recovery, refurbishing and resale, want to re-brand itself? Ask TechTurn, once called Newmarket IT, who felt that its service - diverting potential IT scrap from e-waste to usable technology, or IT salvage - was an idea whose time had come.
Newmarket IT decided the IT refurbishment and recycling business was ripe for significant growth. The name change was accompanied by the creation of a reseller channel for its refurbishment/recycling service. There is a reseller programme whereby authorised resellers sell IT asset recovery services to small-and-medium-sized business customers. So when a customer signs up, TechTurn actually delivers the service giving a fee to the reseller.
There has also been an injection of outside capital and the recruitment of high-powered management, such as Jake Player, the president, who joined in summer 2006 from Dell. There he was the leader of Worldwide Asset Recovery Services.
Jeff Ziegler, TechTurn's CEO, gives us a background to the re-branding exercise, and what the business looks like now.
When did you join TechTurn (Newmarket as then was) and in what position?
After working in the computer services industry for eight years, I saw a tremendous opportunity to build a business around the growing problem of retired computers and "e-waste." With $3,000 in capital and some strong client relationships, I launched the business in 1999 from my garage in Austin. From there, we've built the company into an industry leader with just under $50M in yearly revenue.
How did TechTurn come to the realisation that it was worth turning to computer asset recovery and re-use from leasing?
From my experience in computer services, I could see first-hand that a majority of enterprise IT equipment that was considered obsolete had a lot of life left. I knew there were companies and consumers out there that could use this affordable technology if they understood how to access it.
What were the characteristics of the used computer recycling and refurbishment industry at that time? What were the market prospects?
This industry is still very fragmented, with thousands of small companies and non-profits providing regional computer take-back services across the world. PC manufacturers also offer computer recycling services, but they often work with larger asset recovery companies for processing. This group of companies (which includes TechTurn) will have a strong growth potential as public awareness and regulatory activity on e-waste continue to escalate.
What did you perceive were TechTurn's needs to succeed in its new market?
I knew that relationships with the major PC OEMs were critical to success, so I forged these partnerships early in the company's history. I also saw that the market was heavily focused on recycling, so there was an opportunity to take the lead on refurbishment and resale, which continues to be our business model to this day. It was important to grow the company without any outside investment, but in 2006, we decided it was time to take the business to the next level and secured $50M from Catterton Partners to do just that.
Who did you decide were your suppliers (Dell, etc?) and who did you decide were your customers (buyers of refurbished kit)?
Our main suppliers of equipment currently are large corporations who periodically need to retire large amounts of IT assets. We also work with all the major PC manufacturers to process used computers they receive through their own take-back programs or new computers that need to be taken off the market to allow for updated versions. Our buyers are typically used-computer resellers, but we are aggressively moving into the consumer market through a robust e-commerce initiative.
Techworld: How do you buy from your suppliers?
We don't "buy" from our suppliers. Corporations pay TechTurn a fee to appropriately retire their IT assets. For this fee, we physically remove IT equipment from their offices, securely scrub all hard drives, run thorough tests and provide documentation of the asset retirement, and process the devices for refurbishment of recycling. We then return monies to the corporations based on the residual value of the actual equipment processed. It is a win/win situation for everyone.
We sell in bulk to electronics resellers. However, we are aggressively moving into the consumer market through a robust e-commerce initiative that will offer detailed information for each device on the Web site. In this way, we hope to follow the lead of the used auto industry and become the "Carmax" of computers.
What geographies do you operate in?
Today, TechTurn operates two high-efficiency, maximum-security facilities in Austin, Texas and Richmond, Virginia. We also have partner locations in the Netherlands, Spain, Belgium and Germany, and serve thousands of dealers, VARs and wholesalers in more than 60 countries through our TechTurn Product Sales Web site.
Are USA state policies affecting your business? Should there be a national policy? How should this be implemented if it is desirable?
At this point, we are not extremely affected by state policies, however we are always keeping a close watch on the proposed regulations. We have to be experts on specific regulations in different states so we are always compliant. I think federal legislation in the US would be a positive step if properly implemented...and this is critical. Policies that are not well thought out can actually do more damage than good.
What are your geographic expansion plans?
We are planning to open facilities in Reno, Nevada and Chicago later this year. We are also continually evaluating new partnership opportunities in Europe and across the world.
How is your business developing?
We're looking to the consumer resale market as a huge opportunity through our e-commerce initiative.
How do you position TechTurn with charitable refurb/recycling initiatives?
We have launched numerous initiatives to partner with charities that deliver technology to those who do not have access or means. Some examples are listed below. TechTurn also works with corporations who designate charities - such as the Christina Foundation - for their refurbished equipment.
- Operation Homelink. TechTurn donates refurbishment services and machines to family members of deployed military troops and to disabled troops back home
- Dell Techknow - in partnership with Dell, thousands of refurbished machines are donated to underprivileged students. The student learns about computers and software and receives the machine as an award for completing the class.
- Big Brothers , Big Sisters, Austin. TechTurn donated computers to participants in a computer learning class.
Page BreakHow do you cope with environmental concerns relating to hazardous substances and waste and energy consumption when refurbishing older PCs?
TechTurn is committed to ensuring compliance with all relevant environmental, health and safety organizations and legislations, including the Environmental Protection Agency, the U.S. Department of Defense, the Occupational Safety and Health Act, the Gramm-Leach-Blilely Act, the Health Insurance Portability and Accountability Act (HIPAA), and the European Union Data Protection Directive. Additionally, at TechTurn we have a strict "No Landfill" policy.
How do you process old computers that are not worth refurbishing?
I believe that reuse is the highest form of recycling, so we refurbish and redeploy more than 80 percent of all assets we receive. With that philosophy in mind, even old computers have parts of value. For the small percentage of parts/plastics that are not of value, we send them to partners for recycling and sale on the commodities market.
TechTurn refurbishes PCS, display screens, notebook computers, servers, disk and tape storage products and also networking products.