Texas firm fuels refurbished PC market

If Recompute continues to grow, an increasing number of them will go back into the market. The Austin, Texas-based manufacturer is creating a thriving business out of refurbishing the technological discards of corporate America.

Essentially, Recompute purchases fleets of top-brand desktops, servers, and laptops from businesses, spruces them up, and then sells them to consumers and small businesses at a discount. For instance, $599 buys a computer with an Intel 486 chip and a 14-inch monitor. A 233-MHz Pentium MMX with 32MB of memory and other features can be had for $1690.

Although used computers have been around since shortly after the PC revolution began, recent market conditions have made the refurbished option more attractive, according to Brian Kushner, Recompute's chief executive officer.

Refurbished computers, for instance, are no longer necessarily yesterday's technology. The rapid upgrade cycles of corporate America means that in some cases computers released just six months ago are already making their way to the refurbished market. Thus are Pentium Pro servers available in the recycled market.

Also, customers get the benefit of hindsight, and companies can scout performance reports on old machines and then pick and choose which ones to award a second life.

"The AST Bravo was very good, so was the Dell OptiPlex," said Kushner. On the other hand, "we know to avoid things like the Compaq Prolinea 450M. [ Also] we avoid [certain models] from Dell," he said.

The genesis for the company came to Kushner in the early '90s, after reading an article published in an academic journal from Carnegie-Mellon University. The paper theorized that massive technological purchasing would lead to an a dire need for landfill. Germany, Sweden, and other European nations were already experimenting with "take back" legislation, which would force computer vendors to devise disposal methods prior to sales.

To ensure quality, the company puts used machines through a 32-point testing procedure to test for defects after purchasing them from first-time users, but before selling them to customers.

"The monitor is the Achilles' heel of the computer. They have a higher failure rate. Some go blank, some burn out," he said. Typically, the BIOS and the memory need to be upgraded as well.

Generally, however, the machines are in good working order. "Electrons don't get tired," he said, referring to one of the chief moving components in a system. Finished systems are branded with the Recompute label and the label of the original manufacturer.

Once testing is completed, the company offers the machines for sale on its Web site or through a network of resellers. While small businesses and home users constitute a large portion of the company's business, large corporations are increasingly turning to the company. Aircraft manufacturer Northrop Grumman bought a fleet of Recompute machines, as has KMPG Peat Marwick. School districts sales continue to grow.

With the upgrade cycle getting faster all the time, Kushner sees no shortage of raw material for his company in sight. Except for mouse pads. "Recycled ones actually cost more than new ones," he noted.

There is no denying, however, that the plunging prices of new computers are hurting the company's prospects. A comparison between the Recompute Web site and the Web sites of electronic retailers shows that the refurbished vendor saves customers only $100 on a number of models. In some cases, an equivalent new computer can sell for less. Some aging--though unused--bargain-basement IBM Pentium business PCs go for as little as $650 at some resellers.