A Guide To IT Asset Disposition: What Is ITAD?

In an age of surging spend on data center infrastructure, IT asset disposition (ITAD) is an essential component of safe and secure enterprise computing.

---

As the sophistication and scale of data center hardware grows, the question of what to do with retiring or end-of-life computing equipment intensifies. Companies must keep data secure and compliant, but they must also consider environmental and financial factors. Simply sending data center hardware to the shredder or the scrapheap no longer cuts it.

IT asset disposition, or “ITAD” for short, is the practice of how and where to dispose of IT hardware. Whether you’re updating, upgrading, or otherwise getting rid of computer equipment, IT asset disposition practices support your organization’s disposal needs.

Read on for our comprehensive guide to IT asset disposition as it relates to shifting needs in IT procurement and the enterprise data center.

What Is ITAD? 5-Point Summary

Before we get to subtleties, here are five key take-aways about the state of IT asset disposition for the 2020s:

1. As a general practice, IT asset disposition covers any computing device, whether used for personal or work purposes.
2. Data center ITAD, also called data center asset disposition, specifically focuses on the responsible disposition of IT equipment used by organizations and cloud vendors in their data centers.
3. Hardware lifecycle management should begin before new equipment is purchased. Create protocols for safe disposal that follow a device through its entire lifecycle.
4. Before companies move to dispose of data center hardware, they should fully consider options for its repair, reuse, or recycling.
5. As the market for data center ITAD services grows, companies must perform higher levels of due diligence on ITAD companies. Make sure you’re working with a partner that puts data security first.

Growing Demand for Data Center Infrastructure

Perhaps unsurprisingly for our data-driven age, the world is manufacturing more IT hardware, not less. Nowhere is this trend seen more clearly than in hyperscale data centers. According to Synergy Research Group, the operational capacity of hyperscale operators grew by 24% between the first half of 2023 and of 2024. And judging by the 47% jump in the future pipeline over the same period, this trend isn’t ending soon.

Similarly, an IDC report found that spending on compute and storage infrastructure for cloud increased 36.9% y-o-y in 1Q2024 to $33 billion. “Cloud infrastructure spending growth continues [to be] driven by the explosion of AI-related investments, which not only impact servers but also started to have positive influence on enterprise storage as well”, insists IDC research director Juan Pablo Seminara.

Data center technology is now too central a feature of modern infrastructure for organizations to curb their investments for long. This means that any data-driven company today must have a coherent lifecycle strategy for its hardware asset management. This starts with procurement and runs through decommissioning.

Growing Demand for ITAD

The growth of IT asset disposition services and the future of the data center are closely aligned, with one feeding the other.

Amid this hardware expansion, IT asset disposition services for the data center represent a growing global market. According to Future Market Insights, the ITAD market is worth $17.4 billion as of this year, and will grow at a steady 7.7% CAGR. No wonder the ITAD market continues to mature in both spend and scope. All data center equipment will eventually need repairing, remarketing, or discarding responsibly.

Nowadays, top ITAD providers offer much more than compliant disposition.

Services such as data sanitization already attract a large slice of the ITAD budget. Organizations are rightly anxious to expunge potentially confidential data from end-of-life storage media. The penalties for companies that neglect this fact can be steep.

Meanwhile, IT asset recovery, a specialized practice within IT asset disposition that focuses on maximizing value recovery from retiring or excess hardware, is another burgeoning segment within the ITAD market. Research suggests those businesses that sufficiently refresh their IT equipment benefit from lower operating costs than those that cling to their old equipment until it fails.

Asset Disposition and Responsible Recycling

Although reuse is the gold standard in ITAD, there are still times when it makes sense to dispose of redundant hardware. In these instances, it is important to ensure compliance with all local, state, and federal regulations governing the disposal of electronic equipment.

• Ask the right questions of your prospective ITAD partner.
• Request references and examples of previous disposal work.
• Check for certifications from industry bodies such as R2 and e-Stewards. Both require certified vendors to adhere to a rigorous program of compliance around recycling best practices.

At the same time, be wary of bad actors who might talk the talk and flash the right certificates, but immediately cut corners once your back is turned.

The reality is that too much retiring server and storage hardware still gets unnecessarily earmarked for the landfill. This aggravates the e-waste crisis, as the discarded devices become part of the tens of millions of tons of e-waste generated annually.

ITAD and Supply Chain Management

A top ITAD services company will assist with more than the remarketing and recycling of unwanted equipment. It will also help managing the supply chain that supports your data centers.

The global supply chain for computing hardware is inherently volatile. This means it is challenging for any organization to accurately forecast its procurement needs for any length of time.

An experienced IT asset disposition firm will work with you to analyze hardware usage across your data centers. It will assist you as you arrive at creative solutions to optimize your inventory management, at the same time as navigating stock outs and gaps in your supply chain. Whether you’re engaged in an ambitious expansion or a routine hardware refresh cycle, an effective ITAD provider can help you plan ahead.

Factory recertified drives are an excellent example of how the principle of reuse can help companies looking to fill short-term gaps in their hardware supply. These drives have been wiped, tested, and recertified by OEM-licensed specialists to the same exacting levels of performance as new equipment.

Data Security and Ensuring Legal Compliance

The prospect of losing customer data is enough to keep most CIOs up at night. Some organizations even go so far as to physically destroy drives when no longer needed.

While executive nervousness around data security is warranted, the response is misplaced: the destruction of drives as a means of data protection is a symptom of legacy thinking. Instead, let your ITAD provider take the time to understand exactly what data you are looking to sanitize and develop custom solutions in response.

Check out your provider’s credentials for data sanitization carefully. For example, ask how it ensures compliance with industry standards such as IEEE 2883 and NIST SP 800-88. As for the tools your company used for sanitization, confirm that they’re certified with standard such as ADISA’s (the Asset Disposal & Information Security Alliance), a rigorous standard for data erasure.

Treat this as go / no-go information in your evaluation. The risk of legal liability is too great to proceed with a company that is not properly certified and compliant with the relevant bodies. Protecting your company’s good reputation (and revenue stream) is not to be taken lightly.

IT Asset Disposition For Data Center Decommissioning

Many factors drive the need for companies to dispose of data center hardware. One such scenario is the decision to close down all or part of a data center.

The logistical considerations behind decommissioning a data center are complex. Amid many variables, determining the plan for decommissioned assets is key. Tearing down data center equipment without an approved plan for its reuse, remarketing, or secure disposal is a bad idea.

“A company without a rigorous ITAD program runs the risk of a breach from a much simpler problem: a piece of hardware that was either not properly tracked to begin with or stops being tracked before its final disposition is confirmed.”

Barbara Rembiesa, head of industry group IAITAM

Learn more about how to get the most out of data center decommissioning services in our guide.

The Reuse Movement and Open Hardware

Before disposing of any hardware, a good ITAD specialist will explore all options for reuse.

The commitment to hardware reuse is closely tied to the open source movement. The development of open hardware standards in the data center has created secondary (and tertiary) markets for white label equipment that can more easily be repurposed for use in other data center environments.

The Circular Drive Initiative gathers industry leaders and OEMs to brainstorm how to design for longevity and reusability. Meanwhile, the Open Compute Project (OCP), joined by hyperscalers such as Dell and Microsoft, have pushed the envelope in opening up hardware standards that may otherwise have been subject to vendor restrictions.

OCP members such as Google are known for proactively repairing their custom hardware. The global search giant reportedly runs its hyperscale data centers with little distinction between refurbished and new equipment.

Services to Look For in an ITAD Company

Learn more about what to look for in an ITAD company. Contact Horizon Technology for an expert evaluation of your hardware environment.

Read More About ITAD In Our Expert Guide To IT Asset Recovery