Rumours suggests that the OEM will raise prices again in December.
Following the drop in the British pound, the company is considering raising its prices, reported Channel Web, and many of HPE’s partners have been talking about the price rises, although they have had no “formal communication” yet. One anonymous partner said “there is certainly a price rise coming out of HPE around networking. It has been intimated that some of our pricing for deals will have to rise and that something is coming there from HPE, not HP Inc. But we would expect it to be across the board, unfortunately”.
Other partners confirmed that they had heard the whispers too, following the fall in the pound’s value form $1.49 to $1.30 (€1.34 to €1.17), which is a “17.4 percent decrease since June”. Analyst Clive Longbottom, founder of Quocirca, said that the news “doesn’t surprise him” and that HPE had “got the timing and the pricing wrong” initially.
Longbottom commented: “HPE were one of the first ones to put their prices up and they went up by around 10 per cent in July. I would be surprised if [the initial rise] didn’t happen at the same time as HP inc because there is still a huge linkage between them. I would be surprised if it isn’t a case of both compan
ies deciding to do it at the same time.
“They got the timing wrong and the pricing wrong, so we can expect them to go up by around 10 percent. When you look at Microsoft rising their prices by 22 percent, [HPE] were going to have to put up their prices again. This is no longer a small dip in the value of the pound; this is essentially a devaluation of the pound. It is a long-term issue, and no company exporting into the UK can afford to keep their prices lower.”
HPE commented: “HPE, like any other international company, adjusts prices based on exchanges rates and currency fluctuations. After careful consideration of the business impact of a strong dollar against the pound sterling, we may decide to make adjustments to our pricing.”
Many companies have been raising prices since Brexit, and Robert May, Managing Director of VAR (value-added resller) Ramsac, said that he though some companies were using Brexit as an excuse: “Some of that I think is genuine, some of it is purely down to the strength of the pound. But some of it I think is Brexit labelling and it is an excuse to push up prices. If you look at the economics, it makes sense –- the pound is doing what it is doing so some of it is unavoidable – but some of it is an excuse.
“I don’t think the channel can absorb the rises. Margins dictate that it isn’t possible. I think in some ways it is helping the channel in that it is making clients make decisions more quickly. Where we have had notification from vendors that prices are rising, we have been able to tell clients that as of this date the supplier is putting up their prices. I think there have been quite a lot of projects that have got the push ahead sooner in order to save on the price increases. I think end users are accepting that the prices are going up as well. So from that point of view I think it helps the channel.”