CRN Deep Dive: How the memory shortage is impacting the channel

The AI boom has created a new problem: skyrocketing prices of RAM and SSD, and partners are feeling the brunt of it.

Forget about the AI arms race, there is a new battle in town: memory storage.

This war is very much fuelled by the AI boom (or dare we say, bubble?) where partners, vendors and distributors are struggling with the growth in demand and explosion in prices.

The hyperscalers are investing billions of dollars in data centres, AWS alone promised $20 billion in Australia over the next four years in data centres.

Even companies are shifting their priorities to enterprise-level chip making, Micron’s Crucial shuttered its doors last year after 29 years to focus on the AI boom.

But to build these centres and to run AI, they need storage, and the demand for RAM and SSD has hit an all time high, which is impacting the channel substantially.

Jason Puschmann, founder and managing director at reseller Computer Alliance has seen prices rise astronomically over the past six months.

He explained that a 4TB Samsung SSD used to cost close to $500 and now it retails for $1149. If you need to purchase RAM, a 16GB component was priced at $60, now they’re selling for $200 to $300 on their website.

PC Part Picker shows a number of graphs detailing price rises over the past 18 months. The price of a DDR4-3600 2x8GB (see below) has gone up 150 percent, jumping from $100 in September 2024 to $250 this month.

Looking at the current status of the market, Puschmann calls it “scary”.

“I'd probably say it’s worse [than Covid]. We saw price increases with Covid, but I don't think anything like this,” he said.

A long time coming

This spike in memory prices wasn’t a shock, in fact, partners have been bracing for it, for months.

Puschmann at Computer Alliance saw the writing on the wall a few months ago in October. When they started getting their stock allocation, he explained that something wasn’t quite right.

“Getting stock allocation, you can start to see the trend of the pricing going up,” he said.

He said it is “crazy” what these hyperscalers are doing and what the manufacturers are “letting them do”.

Puschmann puts it bluntly: “To some extent, it's a supply issue and the memory people are being very bloody greedy.”

Robbie Upcroft, country manager ANZ at Tech Data said this was a “long time coming” but the rate of acceleration has taken everyone by surprise.

He and his colleagues had an inkling the crunch would eventually happen later in 2026, not in the second month of the year.

“The fact that it's happened now, this is now squeezing three months of activity into 12 months of run rate that would typically allow the supply chains to keep up,” he said.

“We are seeing some of our vendors push out supply to August and September and so as you can imagine, that plays havoc for a customer who is forecasting and trying to allocate budget and project teams for rollouts.”

Upcroft noted that was an extreme case for some of some high-end equipment, but it's not unusual for their whole supply chain to see what used to be one-to-two-week turnarounds are now being one to two months.

The Tech Data country manager said at least a third of his vendors have alerted the distributor of price rises.

“[The price rises] are balanced by the rising Aussie dollar. Some of that has been offset by the rising dollar. I wouldn't be surprised if there are more price raises, but we've gotten over the bulk of it,” he said.

“But it is absolutely volatile and the Australian dollar is volatile. At the moment, it's gone up five cents in the last six weeks, which is just unheard of.

He added, “Managing that means the contracts that we have with our partners are now being looked at to make sure that there is hedging and flexibility across the board. It's an interesting time, but that's why we all enjoy working in this industry.”

How vendors are handling it

Vendors are also taking a hit from the shortage, Cisco, HPE and Lenovo have changed their partner contract terms with the rising cost in storage.

HPE said it is shortening “the quote validity windows to 14 days (excluding public sector, B2B, OEM),” down from 30 days, and has “updated the contract terms and conditions for server and GreenLake orders to allow for price adjustments until the date of shipment.”

HPE SVP of worldwide channel and partner ecosystem, Simon Ewington told CRN Australia in a statement that the industry is “experiencing constraints and pricing increases” on certain memory, SSD components, and high-performance networking components, due to the “rapid expansion in AI data centres and compute refresh cycles”.

“HPE is working to mitigate the impacts of these challenges to customers and partners,” he said.

“HPE has strong long-term partnerships with our providers, and we have taken steps to optimise and buffer inventory of at-risk components, and to gain earlier deal visibility and better forecasting internally.”

Ewington noted that HPE will do “all we can to maintain stability for customers”.

“However, there will be impacts to pricing and quote validity in response to these market conditions,” he said.

“We are committed to being transparent with these changes and partnering closely with customers and partners throughout this period.”

Cisco has changed its computer order cancellations policy where the networking vendor now has the right to cancel compute orders up to 45 days before shipment.

It also recently cancelled compute promotions and discount incentives including deal registration.

Commenting on these changes, a Cisco spokesperson told CRN Australia due to continued industry-wide demand and increases in memory costs, they will be implementing pricing policy adjustments for select products and services, effective March 7.

Lee Gurd, general manager corporate at Computer Alliance noted that the vendors and manufacturers have been “reasonably open” in regards to expectations around price increases.

“We get little snippets of information quite regularly, or we certainly did back in the last year. It pretty clear that something significant was coming,” he said.

“We're constantly being told, ‘in the next quarter, get your orders in, because there's going to be a cost up’.”

Communicating with customers

To mitigate any frustration from their customers, partners are making sure their messaging of the price rises are crystal clear.

Victor Tsaccounis, CEO at MSP Hubify explained he is sharing articles and news with his clients to keep them abreast of the situation.

“We try and make them aware of what's happening so that they understand the situation, just to keep them informed so they can make a decision,” he said.

One concern Tsaccounis has with customers is their lack of interest over the price rises. He said, “I'm not seeing the urgency based on the predicament.”

“We're communicating through our account managers and I'm not seeing an appropriate uplift based on the situation in spend.”

He explained over the past six months they have seen quotes for jobs nearly doubled.

“In some cases, with jobs that have been quoted the client has said ‘not now’, and then we've gone in six months later, and the job has nearly doubled.”

He added, “We're expecting it to get worse.”

As the prices for memory are fluctuating so much, it has an impact on how partners deliver components and services to their customers.

For Xara Tran, founder and CEO at HPE partner Champions of Change she is constantly managing client expectations.

She said the customer service is “the worst it has ever been”.

“Normally, we used to be able to get quotes within two or three days. Now it's taking one two weeks,” she said.

“That is a lot in this industry because basically it's been bottlenecked on a logistics level, and then from the vendor level.”

Tran added that she is working with her clients directly to ensure their technology budgets have been planned and designed correctly.

Impact on business

Computer Alliance has increases its prices due to the market, but thankfully for Puschmann he hasn’t lost any business. However, he said there is still pressure as vendors change or withdraw bids.

“We're being very upfront and telling people what's going on. Everyone is in the same boat,” he said.

“We've had bids cancelled, support pricing cancelled within the period where the bids supposed to be available,” he said.

“When we do a corporate or government [job] we get a support price from the vendor, we've had recently that support price being withdrawn, and then they give you a new bid, and it's up $400 and $500.”

Upcroft doesn’t believe this shortage will impact Tech Data’s bottom line, calling it “manageable”.

“Our entire business is built to deal with complexity, scale, ups and downs,” he said.

“There is more focus and eyeballs on it. But we see this as, and I mean this openly, as an opportunity to grow share, because we're able to provide the consistency both for our vendors and for our partners, and deliver the outcomes they're looking for.”

Necessity is the mother of all invention

As partners and disties come to terms with new pricing structures and more disruption to the market. Some have seen this as a moment to think outside the box for their offerings to customers.

Tran at Champions of Change has a glass half full approach and has begun introducing more automation into her client’s projects to offset any additional costs from the inevitable price increases.

“With one of my clients, they had 10s of millions of dollars in labour hours,” she said,

“And this automation project basically saves it down to a considerable amount, up to about 20 percent of that manual workload.”

Tran said clients like to see these types of wins and are “more forgiving” if the project costs a bit more as they know the pivot was to avoid the price increase.

"Okay, it's expensive, but you've been able to do some amazing work here. You've saved us so much time, you’ve redesigned this. That’s the game plan for the next 12 months,” she said.

She noted that Broadcom VMware deal was “far more detrimental” than this current storage issue.

"Having these two at the same time does compound, but it's not something that would shift the industry too far,” she said.

“[Broadcom VMware] is a platform change, keeping organisations hostage to a technology based on a price.

"This one you can unite [with customers] and you can work together create new solutions.”

CRN Australia has reached out to Lenovo for comment.