HDD shortage prompts resellers to adapt

Constraints in supply of entry-level machines have forced some UK resellers to think differently

Some of the UK's largest resellers have been forced to adapt their business models to shield customers from the hard drive shortage.

Chip giant Intel underlined the scale of the crisis earlier this week by slashing $1bn (£646m) from its Q4 revenue forecast in response to cuts in production among its A-brand PC clients.

Some of these A-brands have been struggling to fulfil demand for entry-level PCs and notebooks in the UK channel since last month.

John Thornhill, who heads up BT's 1,200-strong reseller business, said his firm had been forced to draw on the purchasing power of its parent to fulfil some orders since November.

"The way we got around it is to use BT," he said. "We have used our existing relationships with some of the very large manufacturers to do exclusives and SKUs on a defined volume commitment [for instance, 6,000 units]."

Thornhill said this strategy had been deployed primarily in the low-end consumer and SMB space. Vendors playing mainly at the higher end, such as HP, have seen more stability.

"Manufacturers have rightly been keeping the components for the higher-end-spec products," he said. "The supply of entry-level products priced at £299 to £399 is constrained among those vendors."

Martin Hellawell, managing director of Softcat, said his firm is "keeping a close eye on the situation".

"We have ordered in some stock so we have a buffer should we require it," he said.

"We expect some issues ahead but so far it has not impacted our business. HP is a large bulk of what we do and it plays towards the high end, which has not been particularly difficult."

Barry Dodhia, marketing manager at Hemini, said constraints are being felt "across the board", with all vendors affected.

"Customers are left with a limited choice of what is readily available but I think they understand and sympathise with the situation," said Dodhia. "Everything is going on back order and we are having to advise customers that they face a long wait – there is nothing else we can do."

Western Digital, which has only just resumed production of hard drives in Thailand, said last week that the fallout from the floods could wipe up to $275m off its Q2 earnings.