Working-from-home drives data center device demand

A company involved in data center and wireless provider decommissioning foresees a “new normal” of higher internet traffic after the pandemic ends. That means more equipment in these facilities and more opportunity in retiring those assets.

Sagent provides equipment resale, maintenance and other services for data centers, wireless providers and more. The Coppell, Texas-headquartered company, founded in 2001, is part of a growing sector of IT refurbishment that handles the devices coming out of these equipment-heavy settings.

The coronavirus impact could mean greater activity within that sector of the IT asset management industry.

Gordon Smith, president and CEO of Sagent, said the coronavirus and the subsequent increase in working from home has shifted demand dynamics for data centers and wireless providers.

“There are so many more connections at the moment that there is a huge level of data going across the networks,” he said. Network operators are seeing up to 30% more traffic than they were before the pandemic, he explained.

Service providers are responding by adding more memory, and since the COVID-19 impacts began to hit the U.S., Sagent has seen increased demand for its refurbished IT equipment due to that surge in activity.

At the same time, the firm has seen less supply coming in from facilities performing equipment refreshes: As firms are managing through the heavy traffic, they’re not retiring equipment like they normally would.

Companies are simply holding onto assets, including network equipment as well as consumer devices, “because they’re not sure what’s coming,” Smith explained.

Other ITAD companies have reported the trend of high refurbished equipment demand but difficulty obtaining used devices outside of the data center market, as well.

Although the stay-at-home orders are temporary and offices will open up again once the pandemic subsides, Smith anticipates the post-pandemic data traffic level will remain elevated. Companies may not want to let go of the ability for employees to work from multiple locations, he said.

“Everyone has to be ready for that plateaued traffic,” Smith said. “I think there’s going to be more technology deployed.”

Examples from the tech world include Twitter and payment company Square, which have told employees they can continue working from home indefinitely after the pandemic subsides. Google and Facebook will allow employees to continue working from home though the end of the year.

Another trend Sagent has observed is an increased willingness from customers to use refurbished equipment. The company has been in what Smith described as a continuing education process since it was founded 19 years ago. Data centers often slowly introduce refurbished equipment into their operations. But with the increased demand of late, the timeline for implementation has changed.

“This is like a fast-track of the education of the customers,” Smith said.

He anticipates that after the pandemic subsides, data centers, telecoms and wireless providers will continue buying more refurbished electronics for their operations.

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