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CONTEXT Introduces New Index to Support Fairer Channel Pricing Discussions

Mathias Knöfel, CONTEXT Corporate Benchmarking Manager
Mathias Knöfel, CONTEXT Corporate Benchmarking Manager

Europe’s IT channel suppliers now have a new price benchmarking tool to provide more accurate market insight for conversations with their enterprise customers, provided by CONTEXT, the IT market intelligence company.

The challenge facing IT suppliers in the region is that traditional methods of calculating Average Selling Price (ASP) tend to be skewed by special deals and projects.

CONTEXT’s answer is to use the trade list price for products sold by distributors to resellers, before any additional discounts have been applied.

Crucially, this new IT Price Trend Index provides a more consistent picture of price evolution whilst still reflecting market conditions, according to Mathias Knöfel, CONTEXT Corporate Benchmarking Manager: “this is a new way of looking at things, designed to support the supplier-to-enterprise customer relationship. While traditional ASPs can vary from week-to-week according to the impact of special deals, our index aims to provide a more neutral view of price evolution safeguarded from extreme price spikes,” he added. “It offers a common basis on which to reduce time spent on pricing discussions, and to make those discussions fairer and more transparent.

The first category to receive its IT Price Trend Index is server RAM. As for the other indices offered by CONTEXT since the start of the pandemic, it compares a four-week rolling average each week to a value of 100, which represents the average of 2019.

The analysis of Europe’s five biggest markets shows server RAM prices declining below the 100 mark in mid-2019 before picking up again in early 2020 when Spain alone topped its 2019 average. Then came a sharp decline in all geographies as demand sank during the pandemic.

Interestingly, prices started to climb again across all markets at the start of 2021, with the UK, France and Spain climbing above their respective 2019 averages in recent weeks.

The IT Price Trend Index will be rolled out across other categories in the future, as part of CONTEXT’s PriceIT price benchmarking service.

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