Supply chain pain: Cisco's base price structure moving north from November

Demand for components at a 10-year high


Cisco is warning customers that the base price of its hardware is scheduled to jump from the start of next month amid the "ongoing industry-wide global supply chain challenges" – and sources have told The Reg the rise will be 7 per cent.

This likely won't go down well with customers – nobody wants to pay more for routers and switches – but it's hardly a surprise: CEO Chuck Robbins said in May the firm was fighting for all the components it could buy as demand surged to a 10-year high, saying it was considering "strategic price increases."

A spokesperson at Cisco sent us a statement:

We review pricing as a standard business practice and work with our suppliers to provide the best value to our customers and partners.

In connection with the ongoing industry-wide global supply chain challenges on certain components, Cisco will increase its base pricing structure effective at the beginning of Cisco's Q2. The base pricing structure reflects increased cost and availability of certain components and related manufacturing and shipping costs.

Cisco isn't alone. HPE bumped up the price of its networking gear over the summer, citing the hike in the cost of components, and Arista admitted it may have to mark up the price tags "on selective models" next year.

During its last set of financial results for calendar Q2, Arista said semiconductor lead times were 60 weeks – double pre-pandemic norms – and campus, routing, switching and data centre products were all hit.

"We're affected on chips, memory, copper, passive components, freight, logistics, expedite fees. I don't know if I can pinpoint; it affects all our products. And the lead times vary… they're all double," said CEO Jayshree Ullal on an investors call discussing the results.

She added that the situation was "more than the worst I've ever seen it, I think it's also going to be prolonged. I guess we're all hopeful, we will all recover from the COVID pandemic. But everything from copper shortages to wafer stock to assembly to manpower, people, logistics, freight. Just about every aspect of it is challenged."

Extreme Networks and Juniper also reported extended lead times during the summer.

One of the pitfalls of the current situation is that customers start to panic and over-order product. Several sources told us that to counter this, Arista was mulling policy changes that sound rather draconian – making products non-returnable or cancellable unless faulty. We've also heard of price hikes of between 5 and 15 per cent.

We've invited multiple official sources at Arista to discuss this but a senior spokesperson said: "Thanks for checking in, we have no comment." That's not official confirmation nor an official denial. Obviously.

According to the good folk at Context, which collates distributor sales-out data to give a snapshot of how the industry is performing, a straw poll of channel execs found the majority said they were only able to source half of the networking kit they need. Notebooks, printers, ink, servers and monitors were also in short supply. ®

Similar topics


Other stories you might like

  • Ubuntu 21.10: Plan to do yourself an Indri? Here's what's inside... including a bit of GNOME schooling

    Plus: Rounded corners make GNOME 40 look like Windows 11

    Review Canonical has released Ubuntu 21.10, or "Impish Indri" as this one is known. This is the last major version before next year's long-term support release of Ubuntu 22.04, and serves as a good preview of some of the changes coming for those who stick with LTS releases.

    If you prefer to run the latest and greatest, 21.10 is a solid release with a new kernel, a major GNOME update, and some theming changes. As a short-term support release, Ubuntu 21.10 will be supported for nine months, which covers you until July 2022, by which point 22.04 will already be out.

    Continue reading
  • Heart FM's borkfast show – a fine way to start your day

    Jamie and Amanda have a new co-presenter to contend with

    There can be few things worse than Microsoft Windows elbowing itself into a presenting partnership, as seen in this digital signage for the Heart breakfast show.

    For those unfamiliar with the station, Heart is a UK national broadcaster with Global as its parent. It currently consists of a dozen or so regional stations with a number of shows broadcast nationally. Including a perky breakfast show featuring former Live and Kicking presenter Jamie Theakston and Britain's Got Talent judge, Amanda Holden.

    Continue reading
  • Think your phone is snooping on you? Hold my beer, says basic physics

    Information wants to be free, and it's making its escape

    Opinion Forget the Singularity. That modern myth where AI learns to improve itself in an exponential feedback loop towards evil godhood ain't gonna happen. Spacetime itself sets hard limits on how fast information can be gathered and processed, no matter how clever you are.

    What we should expect in its place is the robot panopticon, a relatively dumb system with near-divine powers of perception. That's something the same laws of physics that prevent the Godbot practically guarantee. The latest foreshadowing of mankind's fate? The Ethernet cable.

    By itself, last week's story of a researcher picking up and decoding the unintended wireless emissions of an Ethernet cable is mildly interesting. It was the most labby of lab-based demos, with every possible tweak applied to maximise the chances of it working. It's not even as if it's a new discovery. The effect and its security implications have been known since the Second World War, when Bell Labs demonstrated to the US Army that a wired teleprinter encoder called SIGTOT was vulnerable. It could be monitored at a distance and the unencrypted messages extracted by the radio pulses it gave off in operation.

    Continue reading

Biting the hand that feeds IT © 1998–2021