Memory and SSD Shortages Cause Prices To Surge

Blue, Street, Capital, Financing, Technology

AS COMPUTER PRICES SURGE, SOLUTION PROVIDERS NEED TO LEARN TO IMPROVISE

Earlier this week, Dan Serpico of FusionStorm admitted “we’re seeking any and all alternatives because we’ve lost deals.” It’s the unfortunate truth, but shortages in SSD (solid state drives) and memory are causing many solution providers to backlog orders due to an increasingly limited supply of computing components.

Earlier this year, Dell execs assured solution providers these shortages would cause little impact on their all-flash solutions, but prices on limited supply SSDs would be increased slightly due to demand. It turns out, these little increases are not only impacting customer purchasing decisions, but solution provider profits as well. Serpico says their “backlog is higher than normal right now because stuff is on a longer timeframe than we would expect. It impacts our cash flow, our profitability. You can’t really move your costs, so we’re going to see price increases.”

As time progresses, you would hope these shortages are remedied FAST. As it turns out, relief isn’t nearly as timely as you would hope. According to CRN Magazine, Dell EMC CFO Tom Sweet told Wall Street analysts that it “expects memory and SSD shortages to persist for the remainder of the year.” Since the shortage was announced, memory prices have surged to double their normal price and “SSD prices have increased 20 percent”, according to Sweet.

So what does that mean for solution providers? Are solution providers going to suffer from poor sales due to supply shortages?  How can solution providers close more sales in this climate?

One answer is to start getting inventive.

All-flash seems to be trending up in recent months, with HPE’s all-flash revenue jumping up 33%. It’s a cheaper solution than spinning disk drives, is just as efficient as traditional HDDs and SSDs (if not more). All-flash is the way of the future, and learning more about it now may make the inevitable transition to flash in the future easier.

Another way to help mitigate the high initial cost of acquiring technology, if the customer hang-up is centered on up-front expenditure, is to leverage financing as a persuasion tactic. Instead of paying these premiums for storage up front, customers can acquire the technology they need with an easy monthly payment, rather than paying double the price they would normally pay now.

Solution providers close more sales when they provide more value for their services.

A customer who sees a solution provider going above and beyond for them instills confidence and makes those increasing costs worth every penny.

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