The graph above shows that prices have, on average, increased in the last few months. While many clients seem to have accepted the argument that their prices are affected by the exchange rate, others have successfully negotiated to keep increases modest, and one client managed at the end of last year to buy at a lower price. Price variances have therefore gotten much wider and new price increases for larger organisations have had a significant inflationary effect on technology costs.

PI believes that price movements, based purely on exchange rates, can be deceptive. “Suppliers tend to set regional pricing conventions – many of us know that PC prices tend to be lower in Europe and America. Price increase requests that are based on the movement in the exchange rates may therefore be highly opportunistic, particularly in such a competitive market as PCs. PI has empiric evidence that organisations who allow competition between suppliers and who regularly test the market, tend to get consistently lower prices than those who stay with one brand. Creating the right information technology architecture to allow this can therefore over time have a significant effect on costs, for what is a commodity for many organisations”, Low continued.

It will also be interesting to see how organisations adapt to the new lower cost PCs which are aimed at users who can use software as a service and who do not need so many software applications. In addition, Windows 7 is expected to be released in the next year; how will this effect PC performance and costs?

PI will be producing the following benchmark reports over the next few months:

If you are interested in participating in any (or all) of the above please contact Alan Low on 011 803 0005 or 084 890 0005. Alternatively email alan@pibenchmark.co.za