What can MSPs do to reduce the impact of the worldwide hardware shortage?

The current global hardware shortage has turned out to be more of a big deal than anyone could have anticipated at the start. Expert analysts from huge firms such as Forrester are now predicting that it will likely extend into 2023, which is bad news for, well… everything. Here’s what you need to know, and how MSPs can limit the impact.

Where did the global hardware shortage come from?

It all comes down to chips, or semiconductors. The hardware shortage is actually a shortage in processing chips, which are used to power any and all hardware devices. At a glance, this is a pure supply and demand issue. Big companies need a lot of semiconductors to complete tasks such as keeping the cloud servers running, or producing millions of mobile phones and laptops. The pandemic accelerated the demand for processing chips, as big players like Zoom and Teams needed to scale up quickly to meet the growing remote working need. At the same time, the supply chain was disturbed, and deliveries were regularly stalled or cancelled due to the pandemic, which meant less chips moving around the world in total.

Even if you think that your industry doesn’t rely on chips – somewhere along the value chain from manufacturing to delivery, chips are going to be a mainstay. That’s why the chip crisis has become a hardware crisis which has ultimately become a business crisis.

What does this mean for MSPs?

If you handle hardware and devices for your clients, the chip crisis probably already has your full attention. Headlines like this one from Bloomberg share worrying news that a device as simple as a router could have a year-long delay from order to fulfilment, with some carriers being quoted wait times of up to 60 weeks.

If you’re concerned about how you’re going to manage the impact of the global hardware shortage, and communicate your action plan with your customers – here are some great tips.

#1. Think about how to use the cloud to its advantage

Compute and storage servers aren’t unaffected by the chip shortage, but it’s true that the Big Three have a lot of clout and resources which your own clients may not. As a result, it might make sense to encourage your clients to take on cloud services where possible. When you lean on cloud services, you’re benefiting from the sharing of virtualized and multi-tenant offerings, and not only that – but most big cloud vendors are also manufacturing their own chips.

There’s still a shortage of parts going on, but the main cloud providers like AWS, Azure, Google Cloud and Alibaba, all have the resources to prepare for it and get two steps ahead. That means they can have a plan in place before the chip shortage starts heavily impacting the cloud as well as traditional enterprise data centers.

#2: Perform thorough and pre-emptive technology business reviews

Knowledge is power, so it’s super important to be on top of what your clients may need in terms of hardware and equipment, not only now – but over the next few quarters. Here’s where a regular Technology Business Review (TBR) comes in essential.

Start with a full Network Discovery of all assets under your client’s roof. This should include software as well as hardware. Take particular note of hardware that is obviously moving towards the end of its life, or that hasn’t been updated in a long time. You may need to look at metrics such as CPU over time or KPIs against a baseline to uncover the state of some hardware or devices. Think ahead to items that you would usually ignore, and be extra-cautious with that potential year-long wait in mind. Take all of this information, as well as an honest picture of the state of the market to your clients on at least a quarterly basis, so that you can make smart decisions ahead of time, before the shortage starts impacting the hardware that they need.

This is also a good time to talk about rising costs, as even if procurement times remain stable, computers and other machines are likely to be a great deal more expensive, as chip manufacturers raise their prices by as much as 20%. A Technology Business Review is a good place to discuss where the money will be channelled from, and how the business can save elsewhere to make up the shortfall.

#3: Don’t over promise and focus on clear communication

One of the most important elements of dealing with any crisis is to stay honest and communicative with your clients. They don’t want to hear “Don’t worry. This isn’t a problem and it won’t impact you” if in fact you know that lead times for equipment are only going to get longer over the next 18 months. On the other side of the coin, they also don’t want you to panic them!

As a trusted advisor, your role is to provide your clients with the information and the advice that they need to make the right choices. That means starting out with evidence of their current situation, alerting them to any relevant market or industry insight, giving your advice, and then explaining how you can implement this advice in the easiest way possible, and with the least interruption to their business continuity.

When it comes to the global chip shortage, this translates to:

1. A full network discovery-backed inventory of all hardware issues that need attention, not just now – but preemptively as far as 2023.

2. Industry insight that the global chip shortage is likely to continue until 2023. (Try the article we linked above from Forrester if you want to provide additional reading for your customers.)

3. Advice on where they can avoid hardware-reliant processes such as adopting cloud services, and where they should be aware of rising costs, or plan ahead to procure the items they will need with plenty of time to spare.