$900 for RAM is insane.
I enjoy visiting stores like Best Buy.
I’m a proud, avid window shopper, though in this story I was actually there to buy something. It’s fun seeing all those exciting electronics waiting for us on the shelves. One of the reasons we love IT is we enjoy the toys.
Well, I’m walking down the hardware aisle and out of the corner of my eye, behind the locked glass guarding Best Buy’s most expensive items, I catch a glimpse of the most outrageous price: 64GB of DDR5 RAM for over $900!
I was shocked.
Just how expensive is $900 for 64GB of RAM?
There are a variety of components inside every computer: CPU, power supply, motherboard… RAM (Random Access Memory) is just one of those components. It provides fast, short-term memory so applications can run in real time. Historically, it wasn’t a very expensive component in a computer build. The latest generation of RAM called DDR5 has averaged around $200 for 64GB. For it to almost be a thousand dollars? Wow…
And to really sell you on the shock of seeing that price, because a picture is worth a thousand words, here’s a graph of the average price of DDR5 RAM for the past 18 months…
Supply and demand is a hell of a thing.
There’s a current shortage of PC parts and the news about it feels depressing. Who can blame observers after seeing those RAM prices? Now just imagine the stress of those costs scaled to buying fleets of computers for business.
Plenty of articles on the reasons, mostly rooted in AI data center demand soaking up the supply. (They often find themselves cast as the villain of the story, don’t they?)
I don’t need to point out the obvious: when you flood an industry with trillions of dollars in infrastructure investment, you are picking winners and losers. There has always been a limited supply of electronics and you’ve anointed with green who gets that supply, leaving everyone else scrambling. As I sit here typing, the truth is, none of us knows how the AI story plays out. Probably with a bang of excitement and then a more sobering, but still impactful reality. That’s a different article for another time.
These are things we can’t control. The money’s invested, the supply is tight. But where others see problems, you and I see solutions. Let’s talk strategy.
Don’t future-proof, especially not now.
Future-proofing is when you buy hardware that is better than what you need today in the hopes that you can delay upgrading in the future. Full disclosure, I have never thought this was a good purchasing strategy. Why? A multitude of reasons. But the most relevant one is that high-end hardware is disproportionately more expensive and often harder to find, especially when there are shortages.
Going back to our earlier RAM example, I would consider DDR5 right now to be future-proofing. Today there aren’t many applications that really benefit from using DDR5 over DDR4 (the previous generation).
Save your money.
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Go for hardware that gets the job done. You can upgrade later when prices are reasonable. Then show your CFO the cost comparison. Career advice: it’s a winning strategy to keep your CFO happy.
Don’t hoard, but do keep a healthy stock.
If you’re dealing with a good supplier, your hardware pricing won’t fluctuate as drastically as the graph from earlier. Large sellers like Dell have multiple levers they can pull to absorb fluctuations.
What you may still deal with, though, when buying from large sellers is delays in shipping. Sometimes weeks, sometimes months.
When things are good, I’m a fan of keeping on-hand inventory low. It cuts the waste of depreciating assets.
…This may also be a bit of PTSD from my time as a junior IT administrator untangling thousands of VGA cables we never ended up using…
Unfortunately that’s not a winning strategy when we’re dealing with a supply constraint.
Instead, consider keeping a 3–4 month stock. Estimate your team’s monthly needs, factor in hiring by talking to fellow leadership, consider any upcoming projects, pad it a bit, then order. Replenish regularly. The idea is to maintain a buffer. You’ll need the storage space for extra equipment, but it’ll ensure your business can navigate the uncertainty.
Great supplier relationships are worth their weight in gold.
As much as IT is about technology, it’s also about building great relationships. An ironic contrast to the IT stereotype of social misfits. Those connections, especially with suppliers and especially during shortages, can make all the difference.
During the pandemic, transportation logistics were heavily impacted. The world dealt with many of the same hardware shortages we’re dealing with today.
At the same time in 2020–2021, Nvidia released its 30-series graphics cards. Between supply constraints and crypto mining, the cards were nearly impossible to buy. The only ones you could find were on eBay from scalpers selling at two to three times the retail price. Consumers and businesses in industries that rely on graphically intensive work like art, design and media were heavily impacted. Things were so bad, Nvidia made several public comments throughout 2021 including this comment on an earnings call:
“At the company level, we’re supply constrained. Our demand is greater than our supply.” — Jensen Huang, NVIDIA CEO, Feb 24, 2021.
I experienced multiple situations where sourcing parts like these cards was essential to business survival.
The goal was to always have inventory, so I leveraged the relationships I had with PC builders, builders I had worked with for years. They were uniquely positioned to source what most people couldn’t get because of their strong ties to manufacturers.
At a time when people and businesses were emptying their pockets trying to get PC parts, I was able to buy what I needed at MSRP.
Great relationships make a world of difference.
So there you go. You can’t control supply, but you don’t need to spend $900 on RAM.
Come to think of it, I have some extra RAM sitting in a box. Wonder how much it’s worth on eBay…
