Post Covid-19 It Asset Disposition Market is anticipated to reach US$ 15.6 Billion in 2022 to US$ 31.8 Billion in 2027 and it is expected to grow at a CAGR of 7.4% during the forecast period.
IT asset disposition (ITAD) is the process of disposing of unwanted electronic equipment in a responsible manner. Various proper IT asset disposition programs enable organizations to mitigate risks associated with the data stored in assets, minimize cost, and maximize value recovery from old assets. Many third- party IT asset disposition service vendors help organizations manage the retirement, remarketing, and recycling of assets to avoid legal risks, environmental concerns, and unnecessary costs.
The IT asset disposition market has been witnessing significant growth over the years, mainly due to the high adoption of IT asset disposition services in various industries to ensure proper disposal of assets. The evolution in technologies such as cloud computing, big data analytics, Internet of Things (IoT), and the changing IT landscape have contributed to the increase in e-waste. Thus, IT asset disposition is being adopted by many companies to minimize environmental impact and risk of data loss, by following regulatory standards and environmental policies.
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However, the sudden outbreak of COVID-19 has resulted in a decline in the growth rate of the IT asset disposition market, especially in 2020 and 2021. This pandemic has disrupted operations on a massive scale, and manufacturers are facing the challenge of assessing the impact. Past and current lockdowns resulting in the shutdown of manufacturing facilities have put a lot of strain on the industrial sector. The pandemic has caused disruptions in the supply chain, especially causing delays in procuring raw materials, which ultimately delays the production process for various electronics manufacturing industries. Also, disruptions in logistics management and the shutdown of on-site disposal services for a brief period of time affected the IT asset disposition market negatively. The pandemic has deteriorated the situation, consequently negatively affecting the growth of the IT asset disposition market in the short run.
The high demand for IT asset disposition, especially in large enterprises, is one of the major drivers for the growth of the IT asset disposition market. Large enterprises have large amount of funds; therefore, they can easily invest in IT asset disposition services. They also have to follow all the necessary rules and regulations, to maintain their brand image, and also to ensure there is no environmental damage caused by them.
Drivers:
Companies have to re-evaluate their procedures for end-of-life management of IT equipment due to regulatory compliances such as NIST, and HIPAA/HITECH. Many market players do not have the strong market position required to address the implementation of these regulations. Also, lack of a well-organized and secure plan for disposing of old IT equipment can create various issues, such as identity theft and fraud; therefore, a variety of federal and state environmental and privacy regulations govern the proper disposition of computers and electronics, and failure to do so can result in audits and significant fines or penalties. Customers are also now realizing the gravity of the threat of improper e-waste disposition to environmental safety. Additionally, a number of IT recycling vendors now offer their services at no cost to companies. They make money by selling those former assets for scrap, which incentivizes various small- scale industries to opt for the disposition of IT assets.
Surging adoption of new technologies and BYOD trend
The rapid adoption of new technologies and BYOD trend is expected to drive growth of the global IT asset disposition market. The BYOD (Bring Your Own Device) trend is the practice where employees use their personal devices to access organizational systems and data. It provides the flexibility in work, convenience, and decreases infrastructural cost for the enterprises, thereby increasing productivity and innovation. The umbrella-term “Bring Your Own Device (BYOD)” also refers to several other initiatives, such as Bring Your Own Technology (BYOT), Bring Your Own Phone (BYOP), and Bring Your Own PC (BYOPC). These initiatives have emerged to empower employees and align them with the concept of “IT consumerization”.
Increasing inclination toward development of energy-efficient products
Inclination towards the programs such as Energy Star, provides information on energy consumption of products and equipment using different standardized methods will help consumers and organizations to save energy cost and electricity, as well as allied reductions of greenhouse gas emissions. Thus, the demand for IT asset disposal service increases. Opting an IT asset disposal service provider can simplify the entire IT asset lifecycle process. The continuous development of energy efficient products is driving the IT asset disposition market.
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Emerging adoption of cloud-based technologies and demand for electronics due to COVID-19
While disruptions from the coronavirus pandemic initially led to a slight slowdown in data center spending in early 2020, investment rates recovered quickly. In a radically altered reality, the stratospheric adoption of cloud-based technologies sparked by the pandemic has fueled a dramatic uptick, since various organizations declared remote working for their employees. Thus, the demand for electronics such as laptops, smartphones, and tablets for organization purpose has been increased rapidly which is a huge factor to drive the target market growth.
Restraints
Low awareness and high service cost
The lack of awareness pertaining to recycling of electronics as well as high service cost of IT asset disposition are some of the factors that may hamper growth of the IT asset disposition market to a significant extent. IT assets require proper procedures and processes to dispose of after their life cycle. However, companies need to be aware of regulatory and environmental issues regarding the proper disposal of IT assets in order to choose an IT asset disposal service. Additionally, many consumers and organizations, especially in developing countries, dump their used IT assets improperly to save costs associated with proper disposal of the assets. Moreover, the cost associated with disposal services is another factor that may restrain the target market. Due to limited funding, many organizations do not allocate any special budget for asset disposal. As a result, assets may be disposed of in an inappropriate manner which may have negative impact on the environment. According to a recent TechTarget/Iron Mountain survey, nearly half of the companies don’t have a formal IT asset disposal plan, and about 37% of respondents admit that they delayed implementing the plan due to its high cost.
Opportunities:
Rise in demand for IT asset disposition from small and medium sized enterprises
The growing awareness among the small as well as medium sized enterprises to incorporate IT asset disposition helps to boost the market demand for the forecast period. The growing demand of IT asset disposition is another factor to generate new opportunities for the service providers operating in the target market growth in the upcoming years. For instance, In June 2020, according to the UN’s Global E-waste Monitor 2020, Asia generates the greatest volume of e-waste, i.e., around 24.9 MT, followed by Americas (13.1 Mt), Europe (12 Mt), Africa (2.9 Mt), and Oceania (0.7 Mt). Additionally, in March 2019, according to the UN Environment Programme (UNEP), electronic waste, or e-waste, creates about 50 Mn MT of hazardous waste each year, thereby increasing demand for IT asset disposition.
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