Channel attempting to handle global shortage of memory chips
The global shortage of memory chips has produced new challenges for resellers and shifted the market greatly, according to distributor Simms. Andrew Henderson, CEO of Simms, told CRN that the memory shortage has now been dragging on for “the best part of seven quarters”.
“I have been in this business for 27 years and the longest we’ve known shortages has been for two quarters at the maximum. A shortage for seven quarters is changing the landscape quite significantly,” said Henderson.
“Consistency of supply is important to resellers, while in general, because of the basics of economics, when there is a shortage in supply, prices go up. As a distributor we need to look at how we can manage that.
“While we can’t suddenly create more products and stop the price going up, there are a number of things we can do to cushion those challenges for the reseller.”
Henderson said questions remain over the future of Toshiba’s memory chip business and how long the shortage will continue.
“I wouldn’t be running Simms if I could predict how it will all pan out. There are a lot of unknowns in the channel, whether you are a vendor, distributor or reseller,” he said.
“The honest answer of how long the memory shortage will continue is that we just don’t know. The worst-case scenario is all of 2018, while some people are saying the end of Q1.”
Henderson said Simms has taken the decision to focus on the memory and storage market in recent years.
“The phrase that was being used in the distribution market was get big, get niche or get out. That is at least partly true.
“To us the relationship with resellers is very key and it is important we understand what their requirements are. Rather than just supplying that reseller with the product, it is about going that bit extra and understanding the challenges they have on supply, price, or technology to stay relevant to that reseller,” he added.