Circular economy thinking for data centers

Data center carbon neutrality is not only about reducing energy consumption and using renewables. The sustainability of IT hardware assets is a big issue too, especially if we consider the skyrocketing development of the digital sector expected for the near future. E-waste worldwide production is already impressive. In 2019, it amounted to 53.6 Mt, of which only 17.4% was documented as recycled. The good news is that data center owners and operators are taking action to implement circular economy thinking, thus addressing the e-waste issue.  

To reduce e-waste production, important results can be obtained by extending the hardware lifetime. Refresh cycles are getting longer, passing from three years in 2015 to five years in 2020 as an average life cycle, partly because chip performance and efficiency are increasing less fast than they used to. Much longer usable lifespans could be reached by compromising slightly on having the newest and most performing technologies, as researches suggest that failure rates remain lower than 0.5% even after 10-15 years of use. 

However, once the hardware is refreshed, the problem of e-waste remains. It is probably hyperscalers and OEMs that can play the biggest role in tackling this issue. Hyperscalers are IT asset owners on a massive global scale, and can therefore drive high value by applying circular economy best practices. This is what Microsoft is doing, which in 2020 announced Circular Centers, dedicated to reusing and repurposing servers and other IT assets in its data centers. A similar trend is happening in on-premise systems. Indeed, many OEMs like Dell, Lenovo, and HPE offer hardware-as-a-service (hardware-aaS) options, through which owners lease hardware from the manufacturers and return it at the end of the contract. To these companies, re-use, refurbishment, resale, and recycling become a way to increase their Return on Assets (RoA).

The circular economy can be seen therefore not only as an eco-friendlier route, but also as an opportunity to increase asset value or, for those who are buying re-used or refurbished hardware, a way to reduce purchasing costs.

To know more about the circular economy for IT assets and the parts companies are playing in it, read the article by Dan Swinhoe on