Latest / Technology Now / How could considering the whole lifecycle of technology help save money? | Maeve Culloty
Transcript
- MICHAEL BIRD Good morning, Sam. Good morning. Good morning. SAM JARRELL Good afternoon, Michael. MICHAEL BIRD Now, Sam, I have a question for you, as I always do. Uh, when was the last time that you upgraded your phone SAM JARRELL uh, just before HP Discover Barcelona in December. MICHAEL BIRD Oh, okay. And, and what did you do with your old one? I have been intending to sell it. SAM JARRELL I have not yet sold it, so it's sitting in a drawer. MICHAEL BIRD Yeah, I think, I wonder how many of all the phones ever sold currently sat in the drawer, because according to a 2022 article from the Waste Electrical and Electronic Equipment Forum, uh. That's quite hard to say. Uh, over 5 billion phones were predicted to be thrown away that year with the majority expected to be hoarded in drawers. I'm not, I'm not trying to make you feel seen, uh, and cupboards or chucked into a bin of a landfill or to be incinerated. Now to put that into a form you could visualise, Producer Harry has used that stat to calculate that the disposal of these phones will remove over 180,000kg (that’s just under 400,000lbs) of gold from the supply chain along with huge quantities of other precious metals. SAM JARRELL That's a lot of just unused parts, right? MICHAEL BIRD Yeah. And of course, small waste electronics aren't the only thing which need to be disposed of properly at the end of their lives. Larger pieces of tech, like servers also need to be disposed of after they reach the end of their useful lifespan. So this week we're exploring the importance of organizations considering the entire lifecycle of their technology. I’m Michael Bird. SAM JARRELL I'm Sam Jarrell MICHAEL BIRD And welcome to Technology Now from HPE. MICHAEL BIRD So Sam, we talk a lot about specific types of technology. We've covered everything from quantum computers to agentic AI and ways to use waste heat from data centers. SAM JARRELL Yeah. Who could forget the, uh, infamous bath episode, right? MICHAEL BIRD Yes. And I'm sure we'll link the episode in the show notes, but one thing we don't often cover is how people pay for this. Technology as server racks aren't cheap. You've got precious metals. Uh, semiconductors, ceramics, huge quantities of highly specialized materials. Which needed to build our technology and all of these cost money. SAM JARRELL Right. And I would expect all of this would be taken into account when organizations are putting in orders or planning their tech outlook for the future. MICHAEL BIRD Exactly. And it's not just the purchasing which needs to be considered, like the entire life cycle is important from building to decommissioning, to potentially refurbishing and reusing perfectly good technology for new uses. SAM JARRELL So this actually feels like a long-term investment rather than just a simple purchase. MICHAEL BIRD Yeah, a hundred percent. And it's not just how companies can invest in their own technology. I said before that the entire lifecycle needs to be considered, and that includes what happens after the assets are retired. And in fact, according to a recent report from HPE Financial Services. They oversaw the disposition of over 4 million assets last year as part of their work with organizations around the world. So, to find out more about how they do this, I had the privilege to chat to Maeve Culloty, the President and CEO of HPE Financial services. Now this is a video episode so do make sure to check us out where you watch your podcastS. To start with, for anyone who might not have come across HPE FS before, I started off by asking Maeve “who are HPE FS and what do they do?” MAEVE CULLOTY So what we like to say is that we create smarter IT life cycles. So that's kind of a long-winded way of saying we do two fundamental things for HPE's customers and partners. We provide financing solutions and we also provide it lifecycle services. It's the combination of the two. That's the magic. MICHAEL BIRD Okay. So you said, um, IT lifecycle services. Can you sort of explain what that is, why it matters? MAEVE CULLOTY So on the financing side, you know, annually we do $6 billion of financing every year with our customers, and that's a ton of technology that gets financed. And the innovation that we bring to our customers is matching the financing opportunity to the deployment of the assets and making sure, because the deployment of the assets has a return of investment for the customer. And you've gotta make sure that the return of investment is matched. To the cost of the investment. On the other side, it's IT lifecycle services, and what that includes is two core services and that's it. Asset disposition, and that's where we take our customers, IT estate, we look at the value of that estate, and we take it back. We can reuse and refurbish that equipment and it gets a second life, and there's value in that equipment. And we can return the value of that equipment to our customers. And the second service that's really hot right now is certified pre-owned equipment. And certified pre-owned equipment is a very viable alternative to when we've got supply constraints and we've got those old pieces of technology coming back. We give them a second life through our certified pre-owned technology. And IT asset disposition is a inclusive way of saying that we're looking after the technology. We have best in class reuse rates. So on server technology it's 90% reuse on server technology that comes back through our refurbishment facilities. we, our masters are taking back this. Legacy equipment and returning value to our customers, it all ends up in an environmentally sustainable way, which really matters to our customers. MICHAEL BIRD And people physically look at the the equipment and say, oh yeah, you know, that can be put back on the shelf or that, you know, that can be recycled. MAEVE CULLOTY Yeah, exactly. So we take about 4 million pieces of technology back through our refurbishment facilities every year. Uh, we call them technology renewal centers. So the IT equipment comes in, um, the team go through that equipment and they literally go through each piece of technology and figure out what is that technology's next life. It can go into new systems, it can go into old complete systems. Or we can find a second life for it in another market. MICHAEL BIRD So Maeve, you became president and CEO of HPE Financial Services about a year ago. How have you seen things change uh, in the last year? MAEVE CULLOTY I mean, the words unprecedented, you know, are being said so frequently now that it kind of feels, but tried to say it, but it has, like things have changed quite a lot. Um, you know, AI was around a year ago. Um, we were definitely looking at and understanding the risks around AI and now we've got a lot more maturity when it comes to AI investments. How our customers are investing in AI and how HPE Financial services needs to support that. And unfortunately, supply chain constraints, right? So when we're seeing our customers, now they're facing these supply chain constraints. And actually we've just launched an offer which supports this because. Customers are trying to lock in prices as much as they possibly can, and we've lock, we've launched a 90-9 program, so that's 90 as in 9-0, 9 program, and that means 90 days with no lease payments, and then for the following nine months, it's 1% of the lease payments that need to be paid. So over a 12 month period, we're enabling our customers to deploy their assets, test them, stabilize them. And once they start getting a return of their investment, it matches when lease payments ramp up. MICHAEL BIRD I wanna ask you some more questions about AI in a second, but you, you sort of talked about supply chain. what has been the impact on, on your part of the business? MAEVE CULLOTY Yeah, so our business is, you know, what I would call really hot right now, and that is because of our access to, to IT assets after their first life. So when it, once it comes back into our Erskine or Boston facilities, we're seeing that we can reuse that technology much more efficiently and there is a very high demand for it. So our certified pre-owned business and equipment is on fire, and we can't get enough old technology into our facilities and our customers are looking for us to put that into new systems as well as building older systems and just being able to get extended life From their current infrastructure. MICHAEL BIRD I wanna talk about AI. 'cause I think AI is often seen it as like they're seeing it, the complete bleeding edge. Um, are you seeing people change the way that they buy and finance it technology MAEVE CULLOTY Yes, we are. And really there's a maturity now coming into the market when it comes to buying AI systems. And I would say there's kind of like two or three different cohorts of customers. Where we play really well is where our customers, we know what technology they need for what workload and how a revenue stream comes in against that workload. And when we can see through to how our customer is going to generate revenue from the technology. HPFS is willing to take risk, not just in the customer and their use case of the technology, but taking risk in the technology itself. You know, up until a year ago, two years ago, GPUs, we weren't quite sure what's the value of A GPU in the secondary market? Does it, will it have a second life? Will we be burning them so hot that they don't have a second life? And what we're seeing is there absolutely is a second life for GPUs. So again, it's the combination of financing and IT lifecycle services. It's where the magic will happen in helping to support our customers, get access to AI systems MICHAEL BIRD I suppose you're seeing market trends happening sort of before your eyes or the results of market trends happening before your eyes. MAEVE CULLOTY Yeah, and the job of HPE financial services is to watch and assess the risk. Right. We take risk in our customers, right? We're giving them money and we expect them to pay us over time. So it's customer risk and we know what that looks and feels like, and then we take risk in the assets that we're financing. HPE Financial Services is over 20 years old. We've got the best and the brightest in our team of people that know and understand that risk. And it's, it's how we manage that risk. It's how we deliver value to our customers. MICHAEL BIRD how are the increasing environmental demands of AI leading to innovation, do you think? MAEVE CULLOTY Yeah, so I, I heard a customer explain it really well. From an AI perspective, you know, there's three core demands. It's land and space for data centers. It's energy that needs to be supplied, and then it's the supply of the equipment itself. So we're one very small component of the overall environmental, um, capacity that's required to build out AI systems. We're sourcing components as sustainably as we can, and from a financial services perspective, it's really looking at the entire life cycle and making sure that we maximize the reuse of The technology, and again, our team are best in class at doing that. We actually are the world's, you know, of the other world manufacturers, the OEMs out there. We are the only ones with our own refurbished facilities, and I really think that's a. Core competency of HPE. MICHAEL BIRD what are reuse first lifecycle strategies? MAEVE CULLOTY So from a HPE perspective, um, as I mentioned, we are one of the only OEMs with our own refurbished facilities. And within our refurbished facility, we have a principle of reuse first, and that is something that our customers really like, provided the equipment is taken back safely and securely. Um, they have generally no problems with it being reused. MICHAEL BIRD So presumably people think about well hard drives and SSDs and think, well, that's got my data on it. how is that handled? 'cause that's presumably quite a sensitive part of the process. MAEVE CULLOTY Most customers, several customers will actually say, we're gonna take the hard drives and dispose of those ourselves. However, we've got systems and tools and capabilities within our, um, technology renewal centers to safely dispose of and like bring it down to grain level, the decomposition of hard drives. Like it literally looks like salt when we're finished with it to make sure that it's safely disposed of. MICHAEL BIRD Okay. You've been doing this for 12 months. Let's look forward to the next 12 months or maybe five years or 10 years. It's the question that everyone hates being asked. What does the future look like for HP Financial Services? MAEVE CULLOTY So at HPE Financial Services, um, we're, we're supporting not just HPE, but also HPE Inc. So we're, we're the primary captive financing company for both, and I think that we're gonna be living in this supply chain constraints for quite some time. You know, it's definitely gonna last into 2027 at some point, and I think we need to maximize the opportunity. Um, of it asset disposition and certified pre-owned. I think we have an amazing opportunity with HPE networking. We've got a tremendous opportunity to help them build out the best networking business on the planet, and they're extremely enthusiastic about a couple of things. One is the breadth of. HPE financial services capability that the Juniper team didn't previously have access to. And secondly, it's the fact that we've got a sales team that can help and support their conversations with customers, the expertise and the know-how can sit right alongside them So I think we've got tremendous opportunity ahead. It's really exciting with HPE networking, and I think it's just going to continue with AI systems being in demand. And we've just got managed through the supply chain issues. MICHAEL BIRD and in this AI first world, that technology could be that organization's competitive advantage, for example. MAEVE CULLOTY Absolutely, And we see that today. You know, we're seeing customers using GPUs for like two years and they wanna move on to the new GPUs, you know, within a two year timeframe. That's really, really fast. Now, that's not everybody, but there are customers using GPUs for a very short period of time, and we need to maximize the value of that GPU for both them. And for the next customer that needs access to the technology, AI systems is gonna remain red hot. We need to ensure that our customers are getting access to that technology, whether it's older generation or the OGs or the newer generation, we've gotta help our customers with either path. MICHAEL BIRD amazing, Maeve. Thank you so much for joining us on technology now. MAEVE CULLOTY It's been a great to be here. Thanks Michael. POST INTERVIEW DISCUSSION MICHAEL BIRD SAM JARRELL So that was a pretty interesting conversation. Um, I found it interesting that she was talking about how the, the main things, um, that AI is demanding right now are land and space for data centers, energy, and then the supply of the equipment itself. That supply of the equipment itself piece seems to be where, you know, sort of HPE comes in quite a bit, but one of the discussions beyond like the GPU piece of it, all that I've been seeing out in the world is this whole thing where. AI is also eating up the world's data storage. Um, yeah. And so I'm, I'm wondering if that will start to become a bigger, bigger piece of like refurbishing and reusing, um. Pieces of old equipment as everyone needs more and more data storage. MICHAEL BIRD I really liked the, the line, um, reuse first lifecycle strategy. Uh, because, um, I dunno, like I think when, when you buy, uh, when equipment is purchased, I, I don't know if that's something most people consider. Like what are they gonna do with it next? Um, and I like the fact that, yeah, when, when it gets returned to one of these technology renewal centers. They have a reuse first strategy. You know, how can we refurbish this? How can we pass onto another customer who could still get some life out of this equipment? Uh, what I also thought was interesting was, um, right at the top of the interview, well, I said, you know, how's the last 12 months been? And may have said, uh, unprecedented, but like everyone's saying, unprecedented is like sort of lost its meaning. Uh, and it's so true. Like so much has happened. Uh, globally for the last 12 months. SAM JARRELL Yeah. What is a unprecedented time anymore? Right. Yeah. Yeah. I feel like that phrase has been used over the years. I think though, you know, it's a little bit exciting to be on sort of the unprecedented end of things for technology, right? but, uh, I, I did actually quite appreciate hearing that. Um, they process about 4 million pieces of technology through refurbishment facilities each year, which to me really does like underpin that there is actually that reuse. First sort of strategy to everything. Um, it also just generally makes me feel better about all of the waste that we even talked about earlier in this episode. Yeah. Consumer waste is already such a big piece of everything, but I can only imagine the amount of waste that is possible, like through businesses. MICHAEL BIRD From what I understand. We don't just, we don't just sort of process, um, HPE stuff. I think we process stuff from other manufacturers, but I wonder if it impacts the way that. We as an organization, design things knowing that actually we have this, this facility that refurbishes them, you know, reuses them. Um, whether that actually impacts the way that we design some of this technology that we're creating. SAM JARRELL Yeah, yeah. That's a good point. Yeah. If, if we, if include in the actual process, the intent to have it maybe be reused later on or refurbished in one way or another, that. From the build. That would be a, a pretty fascinating and very environmentally friendly approach. I, I would imagine that someone smarter than, than me has probably built that into the process somewhere. MICHAEL BIRD You would've thought so. Now, Sam, uh, we love to find out a little bit more about our guests on technology. SAM JARRELL We do. It’s nice to get to know people a bit outside their work. MICHAEL BIRD Exactly. And as you know, I’m a keen runner so I was incredibly excited to find out that Maeve is also a runner and has done several marathons too and what I really wanted to know was how she got into it MAEVE CULLOTY So I grew up at a time when sports and females in Ireland wasn't strongly encouraged, unfortunately and I had an uncle and he ran and he taught me how to run. Um, and I'm forever grateful that he did that because it didn't just help with my physical health, it helped with my mental health and I can't thank him enough for teaching me how to run. And people do need to learn how to run. Um, from a marathon perspective, just the duration of marathon training, like it really is true. The challenge is in the training, not on Marathon Day. It's absolutely in the training. I use tech. I use tech quite a bit. I had a friend who gifted me a product that analyzes every aspect of my health. Um, has it helped with my health or anxiety? I'm not entirely sure. Um, but for sure it's helping me watch and learn more about myself than I did previously. SAM JARRELL Okay that brings us to the end of Technology Now for this week. Thank you to our guest, Maeve Culloty And of course, to our listeners. Thank you so much for joining us. MICHAEL BIRD If you’ve enjoyed this episode, please do let us know – rate and review us wherever you listen to episodes and if you want to get in contact with us, send us an email to technology now AT hpe.com and don’t forget to subscribe so you can listen first every week. Technology Now is hosted by Sam Jarrell and myself, Michael Bird This episode was produced by Harry Lampert and Izzie Clarke with production support from Alysha Kempson-Taylor, Beckie Bird, Benedicte Demarle, Alissa Mitry, and Janessa Ayache. Our video editor was Leon Radchinski-Gorman, and as always, our theme music was composed by Greg Hooper. SAM JARRELL Our social editorial team is Rebecca Wissinger, Judy-Anne Goldman and Jacqueline Green and our social media designers are Alejandra Garcia, and Ambar Maldonado. MICHAEL BIRD Technology Now is a Fresh Air Production for Hewlett Packard Enterprise. (and) we’ll see you next week. Cheers! SAM JARRELL Bye y’all