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Dell Hit by Server Inventory Shortages

If you’re waiting on a back-ordered Dell server, you’re not alone. Dell confirmed to Channel Insider that it’s experiencing inventory disruptions in some server lines that are causing shipping delays and back orders to partners and customers. Several vendors are affected by a shortage of raw materials used to make components in common IT hardware […]

Written By: Lawrence Walsh

Jan 14, 2010

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If you’re waiting on a back-ordered Dell server, you’re not alone. Dell
confirmed to Channel Insider that it’s experiencing inventory disruptions in
some server lines that are causing shipping delays and back orders to partners
and customers.

Several vendors are affected by a shortage of raw materials used to make
components in common IT hardware products, including switches, routers and now
servers. Some analysts speculate that the supply chain disruption is amplified
by vendors cutting back on their manufacturing orders through 2009 to control
unsold inventory.

Dell declined to say which server lines and models were most affected by the
disruption. A spokesperson tells Channel Insider that the company is working
with customers and partners to minimize disruption to sales and operations.

Last week Cisco
Systems confirmed that it is experiencing switch shortagesat a time
when orders for core networking infrastructure are picking up. Financial
analysts have expressed concerns that the shortages could derail what is
beginning to look like a rosy recovery for Cisco and other IT equipment
vendors.

Cisco and Dell both said that the shortages are affecting the entire
industry. However, some networking and hardware vendors say that they have
inventory to fill their orders and supplement partners who can’t get product
from their primary vendor.

One vendor Channel Insider spoke with said that many vendors experienced an
end-of-year “cash flush” in 2009 as customers purged their budgets on equipment
sales before they lost their funds. This flush threw off vendor inventory
forecasts, and their manufacturers haven’t been able to respond fast enough to the
sudden demand.

The equipment supply chain disruption is a boon for
alternative distributors and VARs who have been sitting on inventory. Several
VARs are posting notes in social networking forums about having inventory for
VARs who can’t source through distribution or vendors. (A word of caution: Some
of these alternative sources are littered with counterfeit gear.)

Dell Hit by Server Inventory Shortages

Lawrence Walsh

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