Cascade Asset Management, Wisconsin
Cascade Asset Management’s most recent customer survey revealed several intriguing facts, such as an increased desire for added IT expenditures, the persistent issue of mobile asset tracking, and client’s limited understanding regarding certifications.
The ITAD firm based in Madison, Wis., recently unveiled its ninth benchmarking report. This survey includes data collected from fifty-four of Cascade’s corporate and enterprise customers, and contains Cascade’s insights as well.
The company’s research into used electronics markets showed a decrease in prices during 2022, which was an industry-wide occurrence. Neil Peters-Michaud, CEO and co-founder of Cascade Asset Management, believes that the recent drop in prices is a normalization of the market following its post-pandemic surge.
“It seems like the sky is falling but it’s just kind of more normal, so we have to be ready to work back in that space,” Peters-Michaud commented. “If you look at it, we’re really pretty much back to pre-pandemic levels in 2019.”
The following were some other key findings from the report.
Growing Prediction for IT Spending
Cascade’s report revealed that the percentage of respondents expecting to increase IT equipment investments in 2023 was higher than ever before. Of those surveyed, 36% indicated they would be spending more, while 34% expected outlays to stay the same. On the other hand, 13% said that they planned to reduce spending, and 17% were uncertain of what lay ahead.
“That was the biggest surprise,” said Peters-Michaud, mentioning other forecasts are indicating a decrease in IT spending.
Firms from a myriad of sectors participated in Cascade’s latest study. Research showed that customers have been affected differently by the economic downturn caused by COVID-19. While one large tech firm has resorted to layoffs, other clients such as those in insurance, finance, healthcare, and government sectors are expecting an increase in electronics disposition.
Cascade is in the process of following up with a few customers who have opted for a three-year device-replacement cycle, meaning they need to replace items bought shortly after the pandemic began.
Disparities in Asset Tracking, Despite Security Concerns
With regard to asset disposition criteria, survey respondents again placed a high emphasis on managing data security and privacy risks. In comparison to the prior year, an increased percentage of those polled highlighted the significance of ITAD provider customer service.
Although data privacy is still a major concern, certain electronics are not being monitored to ultimate destinations. The report found that clients have yet to take the initiative in tracing these items from start to finish.
When it comes to tracking laptops, servers, and desktops, the results were impressive – 83%, 70%, and 68%, of respondents respectively follow these devices through to final destinations. However, as far as company-owned cell phones and tablets, the numbers drop significantly with only 28%, and 21% tracked.
Peters-Michaud commented that the statistics haven’t changed much over the years, but remain surprising to him.
“You don’t know what you lose if you don’t have it tracked in the first place, and there’s still a lot of room for improvement that we see,” he said, “and it’s something our industry can help with to provide that reporting.”
Desktop Pricing Decreases
Cascade’s figures for 2022 revealed a significant reduction in prices for used electronics. During the year, the median cost for laptops and desktops decreased by at least 50%, according to the report. In 2022, the average cost of a desktop was $53.67, while servers were around $199.17. Laptops sold for a mean price of $93.96, and mobile devices had an estimated cost of $22.18.
In comparison to 2021, the average prices for refurbished desktops, laptops, servers, and mobile devices, dropped by 19%.
Also in 2022, desktops experienced a steeper decline in price than laptops, with an average decrease of 26% compared to 15%. Still, Cascade reported that laptop prices hit a high of $126 during Q1 2021 as demand for them skyrocketed due to pandemic-related needs.
Peters-Michaud noted that there has been a noticeable dip in the need for desktop computers, as businesses strive to transition to a mobile workforce. Additionally, he observed that for markets overall, Cascade has seen an increase in prices at the end of December and beginning of January.
Clients Remain Steadfast in Spite of Economic Burdens
Despite the drop in revenue derived from the sale of refurbished devices, clients supplying material to Cascade have remained loyal and have not reported any frustration from diminished returns. This is due to the fact that customers are not particularly focused on personal income from these sales, according to Peters-Michaud.
Cascade, which now has branches in Wisconsin, Indiana, and Florida, is aware of the financial pressures that processors are currently experiencing. This includes decreases in profits from device and commodity sales, as well as increasing costs.
“Cascade and other ITAD vendors are experiencing increased labor and asset processing costs alongside decreased revenue from used equipment sales and scrap metal,” a recent press release states.
Lack of Certification Knowledge
Despite the numerous efforts of Peters-Michaud’s firm and other ITAD and recycling companies to promote certifications such as e-Stewards, R2, and NAID, he noted that there is still a lack of understanding among consumers. When asked how important these certifications were to them, relatively few people said they were ‘critically’ or ‘very important’. However, an even greater percentage replied with “I don’t know what that certification is!”
“Despite everyone’s efforts, the amount of understanding that our customers have about certifications remains very low,” Peters-Michaud remarked.
ITAD Market Projections Remain Strong
It is expected that the worldwide IT asset disposition, ITAD, market size will rise by $7.46 billion between 2022 and 2027, with a CAGR of 6.84%.
Unregulated methods of dealing with retired assets are no longer acceptable, and businesses across a multitude of sectors have turned to ITAD providers for specific disposition needs. Although the ITAD industry has its unique challenges, the projection for the future of IT asset disposition services will likely continue to have year-over-year growth.
