IT sales thrown into turmoil by exchange rates

US dollar - Wikimedia CommonsPractically all transactions in components use the US dollar as a standard and that’s leaving the entire hardware market in some disarray.

Analyst firm IDC has conducted a study of how this has affected the IT marketplace as the euro and dollar are close to parity.

The overall result, said IDC, is that vendors and resellers have had to take a revenue hit over the last year while people and companies buying kit have had to suffer price increases, some of them considerable.

IDC said that server price increases in euro are “considerably more drastic” than for storage and PCs. And Microsoft’s promotion of Bing on the PC which was aimed at pushing cheap notebooks out of the door was compensated by vendors hiking prices on other hardware.

More seriously, given that the datacentre market is one of the more lucrative arenas for hardware vendors to play, the euro-dollar equity has played badly for companies.

IDC said that the Western European server market has risen by 14 percent in average selling prices with vendors seeking to offset the strength of the dollar.

IDC hopes these price hikes will slow down because Asian original design manufacturers will increase competition and drive down prices. The ODMs may also take on channel partners in Europe.

IDC also believes that continuing pressure on the euro will cause less demand on the PC side – bad news for both Microsoft and Intel.