The entire rack gets replaced with new equipment eventually. Probably get replaced every few years or so.
For most of the SMB clients I have, I don't build new servers any longer. I can buy rackmount servers pulled out of a data center that are a few years old at about 1/3 the price. I just put new disks in them and a new OS.
So do they do scheduled collections of failed units? Or just let them sit there indefinitely?