If you have had an IT quote from anyone lately and taken a sharp intake of breath, this article is for you. Our customers are pushing back on hardware quotes more than ever, and honestly, we get it, because hardware prices really are high right now. So let me explain what is going on, why it is not your IT company trying it on, and what you can sensibly do about it.
Here is the scale of it in one line. 16GB of RAM, the sweet spot for most PCs, can now easily cost £100 to £150. In 2022, that would have been fifty quid. Same part, same job, two to three times the price.
The main culprit: AI
There are various factors behind this, but the big one is AI.
There is an enormous boom in datacentres and servers being built to power AI, and every one of those machines is stuffed with the same core components your PC and your server need: memory and storage. The factories producing RAM and SSD drives have a limited output, and a large slice of it is being bought up by AI companies and the firms servicing them, at scale, at almost any price.
When that much of the supply is spoken for, prices rise for everyone else. Consumer and business kit is competing for the leftovers, and the leftovers cost more. It is not complicated economics, but it is painful economics, and it has happened quickly.
Servers are the hardest hit
Servers feel this worst of all, because they carry the most memory and the most storage in the building. Some of the quotes we are now producing for customers who want to keep an on-premises server and replace their current machine are, frankly, eye-watering. We wince as we send them.
And here is the bit I want to be straight about. There are, of course, some suppliers making hay out of this situation. We are not one of them. The cost to us is high, and so the cost to you is high; our margin has not quietly grown in the middle. When a quote makes you gasp, we usually gasped first.
Is it going to get better?
The honest answer: not soon. The rate of increase seems to be steadying, which is something, but do not expect prices to fall back any time soon. This could stay very high well into next year. If you are budgeting for IT, budget on today's numbers, not 2022's memories.
What you can actually do about it
The good news is that "pay up or go without" are not the only options. There are several sensible ways to soften this, and they happen to be things we would often recommend anyway.
- Consider cloud. The fewer components you have to buy, the less this market can hurt you. Moving systems to the cloud shifts the hardware problem to providers who buy at a scale you never could, and it is a direction many practices are heading regardless.
- Upgrade or expand rather than replace. If your current server is fundamentally sound, adding memory or storage to it can buy years for a fraction of the cost of a new machine, even at today's component prices. It is worth an honest assessment before any wholesale replacement, and knowing what server you actually need is half that conversation.
- Consider a rental or lease server. We can offer this: a monthly cost instead of a painful capital hit, with the hardware risk on our side of the table. In a market like this one, spreading the cost has rarely made more sense.
- Sweat your current investment. Get the most out of what you already own, which is something we always encourage anyway. The one non-negotiable: it has to stay safe, supported and reliable. Stretching kit that is out of support or failing is a false economy of a kind we have seen plenty of; stretching kit that is healthy and patched is just good sense.
The honest summary
Hardware is expensive right now, mainly because AI is eating the world's supply of memory and storage, servers are hit hardest, and it is unlikely to improve quickly. We do not like the prices any more than you do, and we will always quote you honestly, tell you when upgrading beats replacing, and help you time purchases sensibly rather than urgently.
If you have a quote that made you wince, from us or from anyone, or a machine you are wondering whether to replace, upgrade or nurse along, get in touch and we will talk you through the options, including rental, at today's real prices. Sorry about them. Genuinely.