Circular procurement model
Microsoft achieved a 92% reuse and recycling rate for obsolete servers and components for the second year in a row, thanks to a procurement strategy that prioritizes circular design.
The company operates seven circular centers around the world where cloud hardware can be refurbished and redeployed, or equipment can be disassembled and its components salvaged. Procurement specifications for new server hardware now include design requirements to facilitate end-of-life disassembly and material recovery.
“Across our cloud operations, for the second year in a row, we reused and recycled 92% of decommissioned servers and components, diverted 90.5% of construction and demolition waste from landfills and incinerators, and expanded our circulation centers to seven facilities worldwide,” Microsoft Vice Chairman and President Brad Smith and Microsoft Chief Sustainability Officer Melanie Nakagawa said in the report.
Supplier contracts include provisions for recovering end-of-life hardware and recovering rare earth elements from circuit boards and other components. This reverse logistics model creates a closed-loop supply chain where materials circulate back into production instead of becoming waste.
The procurement team negotiated increased recycled content in server packaging during 2025. The company has reduced single-use plastics in primary product packaging to 0.07% by the end of 2025, and requires suppliers to develop alternative materials that meet protective performance standards.
Robotics and automation techniques are being developed to improve material recovery rates. These systems can disassemble data center equipment more efficiently than manual processes, increasing the amount of components that procurement teams can return to the supply chain.
