Hewlett-Packard has announced a 5% increase in the price of
servers in the UK, blaming the rise on the strength of the dollar
against the pound.
UK prices are being brought in line with dollar prices, said
Dave Poskett, director of the solutions partner organisation at
HP.
In a statement
HP Technology Services Group which makes servers, said, "In
response to rising costs and the weakening of the pound against the
dollar, HP will increase the price of its Industry Standard Server
portfolio by 5% in the UK."
HP said the price increase was in "direct response to the rising
cost of doing business in the UK" and expects all changes to be
implemented by Monday.
The company will also raise the price of its PCs by mid to high
single-digit percentages in the UK.
Other suppliers that work in dollars could implement similar
price rises.
John Higgins, CEO at IT industry suppliers trade association
Intellect, said in recent years the UK had benefited from a strong
pound. "This is the market reverting to more normal conditions," he
added.
Higgins said suppliers were under pressure because they were
working with tight profit margins following years of price cutting.
"Hardware is a relatively small proportion of the IT spend and over
the years we have got more for our money."
The rising dollar is not the sole reason for IT price hikes. In
July the world's largest IT distributor Ingram Micro said it would
pass on the cost of rising fuel prices to customers.
"Past practice has seen Ingram Micro absorb significant annual
freight costs for shipping the products it distributes to
resellers," it said in a statement at the time. "Rapidly rising
fuel costs mean that this practice can no longer be continued."
IT departments are tightening their belts, according to analyst
firm Forrester this week. In a study of 1,000 IT managers across
North America and Europe, Forrester found that 43% of
businesses have cut their overall IT budgets in 2008 in
reaction to the slowdown in the global economy, while 24% have put
discretionary spending on hold.