While headline inflation may have little effect on IT prices, users should be wary of vendors using the macroeconomic figures to retro-fit justification to price rises in the pipeline, warned Rich Gibbons, service director with software asset management intelligence organisation The ITAM Review.

“With the subscription model coming into software more and more, all the vendors are putting their prices up anyway one way or another anyway. We’re concerned that inflation in the economy will be used as a sort of backwards-facing justification for price increases already coming down the line,” he said.

Microsoft price increases of around 25 per cent will begin next month for Office product subscriptions, he said, affecting users needing to renew contracts after that date.

Users can try to negotiate with the big vendors, Gibbons said. “Whether that would have any impact is a different matter. It is one of those things. But if prices go up, you can look at your usage, and your position across the board. There can be some great opportunities to negotiate on cloud, for example, and that can balanced prices rises elsewhere.”

No matter what the cause, price inflation was still a reality in the IT hardware market, said Ian Nethercot, supply chain director of UK hardware reseller Probrand.

“External inflation is potentially a problem for sure. We’ve seen prices continually rising for the last 12 months, being driven by a number of factors: logistics, shipping, energy prices. All of this adds up. We’re seeing price increases come into place from the tier one vendors, and after that, everyone else follows.”

He said price rises of 10 per cent were becoming the norm among vendors including HP and Cisco.

Although the pandemic-induced constraint on chip supplies was starting to ease, it was still affecting prices and lead times, Nethercot said. For most hardware, businesses were being quoted July and August for fulfilment. In networking equipment, lead times were between 300 to 400 days, he said.

Lead times, together with ongoing price rises, were making businesses think twice about launching major technology upgrades, he said. “But we are seeing price rises make businesses put off purchases. Projects are being put back and that will continue until prices stabilise or come down.”