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By | Paul Kunert 22nd July 2016 11:36

Hewlett Packard Enterprise: Brexit, weak pound. A price hike is coming

Servers, storage, legacy networking now up 6-10%

Exclusive Hewlett Packard Enterprise is to bump up the price of its infrastructure gear in Blighty from today, 25 July, blaming the crash in the value of UK sterling currency for the hike.

According to sources close to the matter, the cost of servers will go up between six to seven per cent, and storage and legacy networking by circa 10 per cent.

El Reg understands this week was the cut-off date for ordering kit in HPE’s third quarter of fiscal ’16, even though its Q4 doesn’t start until 1 August.

“HPE always carefully considers any price changes for our products and adjusts prices based on exchange rates and currency fluctuations," a spokeswoman told us.

The value of the British pound had fallen by roughly seven per cent against the US dollar in the 12 months prior to the EU Referendum, but since the Brexit vote was down around 15 per cent.

Despite this, accusations of profiteering were levelled at companies that raised list prices in recent weeks including Dell, HP Inc, Asus and a bunch of IT components-makers.

Cisco sells its products in US dollar and so UK customers paid for the relative crash in local currency as soon the sterling started to slump on 24 June.

Sources told us HPE’s server shipments were lower than forecasted this year and the company didn’t raise prices earlier because it was concerned about the potential consequence on demand.

“What does this mean to the customer,” a contact at one large reseller told us, “it is too early to tell. Will customers order 10 per cent less or be forced to increase the budget? There are certainly some that are asking us to share the pain.”

Channel sellers told us there was a marked slowdown before Brexit and in the four weeks since. “It is a tough market in the UK – x86 is down the toilet. Some people will say it is the cloud but I think some of it is customers sitting on their hands amid this uncertainty”.

“There is a genuine Brexit effect - we saw a slowdown leading up the it [the vote] and after,” our contact said. ®

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