IT distributors are moving quickly to address the massive spikes in prices and increasing shortages of memory and storage devices that are adding volatility and uncertainty to channel partners’ server, PC, and storage business.
The IT channel finds itself at a crossroads as supply chain turbulence, particularly in memory components, sends ripples through the market.
With memory prices escalating and supplies tightening, distributors and their channel partners are navigating a landscape fraught with uncertainty, according to top executives from five IT distributors who met with CRN for exclusive conversations during last week’s Global Technology Distribution Council (GTDC) Summit in Oceanside, Calif.
[Related: Top Distribution Execs Are Grappling With Financial Impact Of Tariffs]
Six years after the COVID-19 pandemic-induced volatility, the IT component supply chain is again under duress caused by shortages in memory and storage media.
Memory prices, for instance, are already up 100 percent in the first quarter of 2026 compared to the previous quarter and are expected to continue rising through the year, according to HP CFO Karen Parkhill during her company’s first fiscal quarter 2026 financial conference call.
Meanwhile, Western Digital CEO Irving Tan earlier this month, when discussing the company’s second fiscal quarter 2026 financials, told investors that the company is pretty much sold out of hard drives for calendar 2026 and that its top customers have already signed two long-term agreements for 2027 and one for 2028.
Channel partners who had come to expect periodic shortages are now confronting a more sustained and widespread crunch, one that is driving up prices and threatening to derail project timelines, the distributor executives said.
Jason Bystrak, senior vice president of Harrisburg, Pa.-based D&H Distributing‘s advanced solutions business, said that while some channel partners and customers may not yet be ready to acknowledge the seriousness of the issue, they really need to be prepared for price increases and shortages.
“I think there’s concern that that could be coming,” Bystrak said. “This is just me talking, but now we’re seeing that with the adjustments in policies and things, some people are saying they might delay some projects. There’s a little bit of almost disbelief, like, ‘Oh, prices didn’t really go up that much. You’ll call me next week and tell me it’ll be cheaper next month.’ From what we’re hearing, people will then realize that OK this is real. There might be increased buying this spring. And then, because of that demand surge, there could be some real shortages coming up in the second half of this year.”
Bystrak also said that the large cloud hyperscalers are exacerbating the scarcity by locking in large orders for hard drives, SSDs, and memory, and leaving OEMs scrambling for the remainder.
“The SSDs in particular is another area where the hyperscalers are buying up supply, and limiting supply for others,” he said. “It’s similar to the memory piece. We do sell some of those things at the component level, and certainly the pricing is changing, and supply could start to become constrained. But a lot of that’s also through our OEM partnerships.”
For channel partners, the memory and storage shortage isn’t a distant problem. Delays and price hikes are already beginning to bite, particularly for partners with thin margins or long-term contracts. Distributors report that many partners are being forced to revisit quotes, adjust project timelines, and even renegotiate deals as costs climb.
Patrick Zammit, CEO of TD Synnex, headquartered in Fremont, Calif. and Clearwater, Fla., told CRN that IT vendors are still trying to understand the situation and how to manage it.
“It’s changing daily,” said Zammit (pictured). “There’s a shortage issue, and a big price increase. I think price is an even bigger issue than the shortage. And so how will the OEMs handle it? Quote validities have been reduced dramatically from 30 [days] to 15 days. And the most contentious topic is, what is the backlog today? Is it going to be re-priced or not?”
Re-pricing of backlog orders has become a major discussion point with vendors and channel partners, Zammit said.
“We are confronted with a series of requests from the vendors, and obviously we are fighting for the channel and telling them, ‘The past is the past. Don’t re-price the backlog,’” he said. “We understand the challenge for the future, but for the past, don’t do it. That’s probably the biggest challenge we have from a pricing standpoint in the short term. We should expect further price increases throughout the year, because all analysts and everybody are very clear that the price increases are not over. There’s more to come, driven by the memory price increase. We just need to be prepared for it.”
Zammit said he expects average selling prices for all hardware to rise this year between 10 percent and 20 percent, or even more for the year. And while consumer sales volume is likely to be hit hard because of high price elasticity, the same cannot be said for business-focused sales, he said.
“We are not concerned about B2B volume,” he said. “We should see some impact, but you still have a PC base to refresh to be Windows 11 compatible. You have a server base to refresh because the new generations are significantly more efficient. You have [endpoint security hardware] that requires upgrades. You have to upgrade your switches in the data center to support AI. You have to upgrade your storage systems to support AI.”
Eric Nowak, president of Centennial, Colo.-based Arrow’s global enterprise computing solutions business, told CRN that his company hasn’t seen a real impact on availability because of the memory shortage, but he admitted that hardware is only about 25 percent of the distributor’s enterprise business.
“But all our vendors basically tell us that it’s becoming more and more difficult for them to maintain lead times, to be able to build products,” Nowak said. “Internally, we have a manufacturing business, AIS (Arrow Intelligent Solutions). And yes, we are seeing the SSD and memory shortage. So basically, we try to make sure that we are more clever than our competitors and make the right choice and place the orders with the right momentum. But it’s tough, absolutely.”
Exclusive Networks is helping its channel partners look at their pipelines and work with their end users to have the right strategies to minimize any disruption to their projects, said Jason Beal, president of the Americas business for the Boulogne-Billancourt, France-based distributor.
“We’re working with our vendors from a supply chain perspective if they want to use our footprint, our inventory, to help them avoid backlog situations for their big customers,” Beal said. “We play a critical role because we sell both software and hardware, and we have to be really good about being very proactive and strategic with our partners and the vendors so that supply issues don’t end up having a lot of impact on users.”
Exclusive Networks has already seen some of its vendor partners in North America and globally raising prices, Beal said.
“So we can certainly say that’s an impact,” he said. “We haven’t yet been in a position where we have seen stock outs. What we have heard are some potential extended lead times. I can say we are seeing across our portfolio some price increases, but no stock outs or backlogs, but we’ve seen extended lead times.”
The basic challenge facing IT distributors is what happens to the price elasticity of memory and the other components that are going up in price, said Paul Bay, CEO of Irvine, Calif.-based Ingram Micro.
“How that impacts the end user demand is yet to be determined because we’re just in the early innings with all this getting through the system right now,” Bay told CRN.
IT distribution has been through these types of challenges before, and managing them and turning them into opportunities depends on the business outcomes solution providers are trying to solve for their end users, Bay said.
“We’re not singularly threaded down one kind of lane to do it,” he said. “Now, that requires a lot more focus and line of sight to what those opportunities are. So we’ve just got to be more crisp as an ecosystem: vendor to Ingram, Ingram to customers, and ultimately out to fulfill the end users. We can manage terms and conditions. We’ve been doing it. Everybody will have a little bit of a different flavor. The vendors all have different perspectives depending on whether they have a competitive advantage or not. The good news is, we sit right in the middle of IT, so if one way is better than the other, we’ll be able to lean in. If not, then we’ll be able to help supplement with another offering.”
At least two distributors—TD Synnex and Arrow—have their own integration businesses that give them increased insight into component availability and pricing.
For TD Synnex, the company’s Hyve integration and deployment business last fall gave the distributor advanced notice regarding changes in the supply chain, Zammit said.
“Hyve is supporting hyperscalers,” he said. “Hyperscalers are driving the demand. And so we had some visibility on it. We’ve been able to build inventory and give very good support to our customers. But obviously, that advantage will diminish over time.”
Arrow’s AIS business needs to fight against “everyone” to get the supply it needs, Nowak said.
“And at the moment, we do not have any certainty,” he said. “So basically, we place an order for disk or memory. The providers don’t give us a lead time. They do what they can, and we take the goods when they come. We are taking a lot of orders in advance, and we see customers placing their orders in advance because they understand the lead times will be higher than expected. They understand also that very probably, as the year goes on, it will be worse and worse. So proportionally, we see more hardware orders at the moment than software orders. Basically, people need to place both. They first start with the hardware, and hope that the delivery will be shorter.”
In the end, distribution plays a key role in helping mitigate issues around shortages and the resulting price increases, said Jason Beal, president of the Americas business of Exclusive Networks.
“Partners can rely on distribution to help them to bring clarity, to their strategic planning,” Beal said. “We are working with our partners to make sure that as their vendor prices increase, as there are changes or restrictions around quote validity, they understand it and they’re able to react with their end customers. In some cases, partners may miss a communication from a vendor. We have the opportunity, we have the responsibility, to ensure that they know about changes to some of those business conditions so that they don’t get caught between the vendor and their end customers.”
