Storage Wars

If you haven't been paying attention lately, the price of technology has been on the rise. Specifically RAM and storage, so if you are in the market for either of those right now, good luck! It's actually pretty crazy how much things have swung from the time that I have been in this field. I remember several years ago memory cost something like $1 a Mb if not more and people were pretty much okay with that. It's what you expected to pay, and sure it was expensive, but anything with technology was expensive back then.

Then prices started falling to almost ridiculous levels. Technology was getting faster, bigger, cheaper, and things were pretty darn great. Graphics cards were still pretty expensive, but that was to be expected. Even before the whole crypto mining glut. Now, with the advent of AI and all the other stuff that is going on, we are starting to see memory and storage inflated to ridiculous levels. Part of you has to wonder if it is an artificial pump, but with all the hype flying around about data centers and all of that, I guess it isn't too hard to believe.

This snippet from an article was shared with an email listserv that many of the Education Technology leaders in the state of Michigan are members of.

Can you believe that?! It's only February and they are already sold out for the year and into 2027 as well. I never actually saw a list of who the "top seven customers" are, but I have a feeling I can guess. Probably three of them are the major computer manufacturers like HP, Dell, and Lenovo. As for the other ones, it probably wouldn't take too much research to figure out who they might be.

Earlier this week I wrote a post about the detriments of technology in education. Right now, we are feeling another drawback that I didn't cover in that post. The state of Michigan has a competitive bid process for tech devices. This allows them to drive the price down via the power of consortium buying. For example, there are about 890 school districts in the state of Michigan. If ever district buys only 100 devices each year, that's 89,000 guaranteed sales for the company. That gives them a lot of wiggle room to pass along the best price possible to us.

Obviously, some districts will be purchasing much more than 100 devices per year, so you can probably see why participating in the statewide bid is beneficial for both the districts and the vendors. From the district standpoint it also satisfies the competitive bidding requirements that the government requires for large purchases.

Here's a more specific example: An HP ProBook 4G1a 14 goes for about $1300 at retail. My website says $1379, but a quick Google search shows them on the HP site for right around $1299. By contrast, the price that school districts can purchase them for due to education discounts and the quantity discount via the consortium is $527 per device.

That's a pretty impressive discount right? The problem is, with the price of storage and RAM going up, these companies are starting to take loses on these machines. In fact, many of them have started pulling the devices off the competitive bid list because they can't afford to sell them for that price anymore. Which in turn leaves them at risk for not being selected next year as vendor, but when you are as big as say CDW-G, do you really care?

In addition to that, some devices have been projected to increase by something like $100 to $200 per device. That leads to some big problems for school districts when they have a very fixed budget and they also have a fixed schedule of upgrades. My district is doing pretty good. I was able to get an order in for 210 Chromebooks before the price jumped up too much, but that isn't so for some other districts.

I've been seeing quite a few emails in my listserv lately about districts not being sure what they are going to do. You have to remember some of these districts have fleets of thousands of devices. They likely don't replace them all at the same time, but even if they are on a rolling schedule of replacing 30% of their fleet each year, a $40,000 to $80,000 increase on 400 devices is big pill for them to swallow.

I'd be almost embarrassed to take that news to my business director and my superintendent. Hopefully the price eventually comes back down as the hype dies and new tech is discovered. However, it has been implied that Moore's Law is slowing down and evolving, so who knows where we will go from here.

In the end, it might end up being that schools start to move away from as much technology not just because it is detrimental to students, but simply because they can't afford it anymore.