Memory crunch makes refurbished kit look a lot less secondhand

Rising memory prices are pushing more customers toward refurbished tech, suppliers say, with warranties of up to three years helping to make secondhand kit a less daunting purchase.

Memory costs have more than quadrupled this year as manufacturers prioritize more lucrative high-bandwidth memory (HBM) for servers powering AI datacenters.

Many enterprises are keeping equipment longer in an uncertain economy. Ben Caddy, senior analyst at Omdia, said suppliers were linking refresh discussions with opportunities to recover value from customers' aging kit.

By 2030, he predicted, 35 percent of "all the hardware sold for the channel will be taken back by partners," driven "by the sheer economic logic of taking equipment back, recovering value, and embracing more circular IT lifecycles."

This is already helping some customers "unlock some capital to put towards those [relatively] small refresh plans," he said while hosting a panel on circular IT at last month's Canalys Forums in Barcelona.

Refurbished smartphones are growing in popularity, but persuading customers to trade in their old devices remains a constraint on supply.

The same applies to PCs and other equipment, said Jon Sansom, MD at GreenSafe IT. "Availability is a challenge," he said.

Marcel Joosten, group director of marketing and digital commerce at tech lifecycle specialist XTENTEC, said the company now offers trade-ins when customers buy new kit. "We're actually financing the residual value" at the end of year two, three, or four, when customers return the equipment, he told the audience.

XTENTEC collects, refurbishes, rents, and resells equipment, and has an agreement with HP to renovate aging products, with a two or even three-year warranty available as "just an SKU on the list from HP."

Joosten said equivalent support, including HP Care Pack services, helped make refurbished equipment more attractive to buyers.

Customers want to cut their carbon footprint, and many public and private sector tenders require it. But the "most important thing" for many is trust, said Patrick Molberg, CEO of Advania Finance.

"The customers have to trust the refurbished equipment and have to trust the process. And I think one of the things that we have to be better at as a whole is that we kind of need to have a standard methodology regarding verification."

Work on verification standards with vendors including HP, Lenovo, and Dell is ongoing, Molberg said. He also argued that lifecycle services should be built into purchasing decisions rather than added three or four years later.

Joosten argued that listed US tech companies' focus on quarterly sales and market share can work against refurbishment. "That needs to change," he said. "I think there should be a market share figure for circularity." (R)