The physical security industry is navigating one of the most challenging hardware pricing environments in recent memory. Component costs are rising rapidly, driven by forces that are structural, not temporary, and stable hardware pricing is no longer something integrators or their customers can take for granted. The vendors in this space have had to respond. Most have responded by raising prices. Some have exited hardware sales entirely. When costs in a supply chain increase, the trickledown effect is real.
And because of this Salient took a different approach.
Understanding the forces behind today’s pricing environment and how your hardware vendor is responding to them has become a meaningful part of how integrators protect their customers and their own margins.
Why Hardware Costs Are Rising and Why Stable Pricing Is No Longer the Norm
The cost pressure hitting security hardware today is the result of several structural forces converging at the same time, and the effects are being felt across every vendor in the market.
- AI Infrastructure Buildout: The rapid expansion of hyperscale data centers has created enormous demand for computer components including chips, memory, and server hardware at a scale the global supply chain was not built to absorb this quickly. This demand does not stay contained to enterprise data centers; it flows downstream into commercial hardware, including the server appliances used in video management systems.
- Component Concentration: A significant portion of critical semiconductor manufacturing is concentrated in a small number of facilities globally. Three manufacturers; Samsung, SK Hynix, and Micron, account for roughly 90-95% of the global DRAM market, making the entire supply chain highly sensitive to decisions made by a very small number of players. Geopolitical factors, natural disruptions, and capacity constraints at any of those facilities can have outsized effects on availability and pricing across many downstream product categories.
- Reduced Supply of Commercial DRAM: DRAM chips used in SDRAM modules and SSDs that are standard components in commercial server hardware are facing tightening supply. The AI buildout is driving surging demand for High Bandwidth Memory (HBM), a more profitable DRAM variant, which is incentivizing the three major manufacturers to shift production capacity toward HBM and away from the conventional DRAM used in commercial and industrial applications. For the security industry, this means competing for a shrinking pool of components against the full weight of global AI infrastructure spending.
- Tariff and Trade Policy Uncertainty: Evolving trade policies between major manufacturing countries and the United States have introduced additional cost variability for hardware imported as part of finished appliances or component assemblies.
These are not short-cycle disruptions. The underlying structural factors, AI demand, manufacturing concentration, and policy uncertainty, are expected to persist for the foreseeable future, with meaningful relief unlikely before 2027 at the earliest. Waiting for conditions to normalize is not a planning strategy.
Why Salient’s Response Is Different From the Rest of the Market
When component costs rise, vendors have limited options. The industry default has been straightforward: raise prices. Build the cost increase into the base price, move on, and let the new number become the permanent floor. Some vendors have gone further and exited hardware sales altogether, offloading the problem onto integrators and their customers. Neither approach serves the channel well.
Salient made a different choice. Rather than embedding cost increases into the base price of hardware, where they would remain indefinitely regardless of whether underlying costs improved, we introduced a surcharge model specifically designed to pass through only the documented, certified cost increase to the end customer. Nothing more.
The distinction matters more than it might initially appear. When a vendor raises its hardware price, that increase becomes the new baseline. If component costs improve in 2027, the vendor has no structural obligation to pass that improvement back. The margin captured in the price increase stays captured. A surcharge, by contrast, is explicitly tied to the cost conditions that created it. When those conditions change, the surcharge changes. If costs return to baseline for a given product, the surcharge on that product is eliminated.
To our knowledge, this is not how the rest of the industry is operating. Most vendors are not structured this way, and integrators should be asking their hardware vendors pointed questions: how is your pricing increase calculated, and what would cause it to come down? Salient’s surcharge documentation, including certified cost data from our contract manufacturer, is available to partners and their customers on request. That level of transparency is uncommon, and we think it matters.
The core principle is straightforward: your customers should not pay more than the actual cost increase requires. No extra margin embedded in a permanent price change. No cost-of-doing-business buffer built into a COGS adjustment. Just the documented increase, passed through cleanly, with a defined mechanism to reverse it when conditions allow.
What Integrators Need to Know About Quote Management
In a volatile pricing environment, many vendors have responded by compressing quote validity windows, sometimes to as little as 7 to 14 days, as a way to limit exposure to cost fluctuations between the time a quote is issued and when an order is placed. This puts real pressure on integrators trying to manage normal approval cycles. Salient’s approach is different. By using a structured surcharge model to separately account for cost changes, we are able to maintain the standard 30-day quote validity window that integrators have always relied on. The surcharge handles the pricing variability; the quote window stays intact. That is an intentional part of how this policy was designed.
Several practical adjustments can help integrators protect their customers and their own margins:
- Set customer expectations at project kickoff. Customers who understand upfront that hardware pricing in 2026 is subject to change and why are far less likely to be surprised when a number needs to be updated. Frame it as part of how you manage their budget responsibly.
- Flag quote expiration risk for long-approval projects. If a customer’s approval timeline extends beyond the 30-day quote validity window, that transition point should be identified and communicated in advance, not discovered at sign-off.
- Account for inventory timing. In some cases, if inventory cannot be fulfilled within the current pricing period, updated rates may apply. Building timeline margin into hardware-dependent milestones reduces exposure to this risk.
- Never use last purchase price from your ERP or accounting system as the basis for hardware quotes. In a volatile pricing environment, historical purchase data is not a reliable proxy for current cost. Always verify pricing directly with your Salient account representative before building hardware into a proposal or customer quote.
How to Talk to Customers About Hardware Price Changes
For many customers, a price change notice from a vendor can feel unexpected or arbitrary. The integrator is often in the position of explaining it, sometimes before the customer has had any direct communication from the vendor. How that conversation is handled shapes how the customer perceives both the vendor relationship and the integrator’s role as an advisor.
The most effective approach is to bring transparency to the conversation before the customer asks for it. A few key points to anchor that conversation:
- The cost increase is real and documented, not a discretionary pricing decision. Salient’s surcharge is calculated against certified cost data and independently validated before being applied. That certification is available to customers upon request, so if procurement asks how the number was derived, you have something to point to.
- Salient’s surcharge model protects your customers from permanent price increases. The surcharge exists specifically so that cost changes don’t get baked into the base price forever. When hardware costs improve, the surcharge comes down. Most vendors in this industry are not structured to offer that.
- Salient does not mark up the surcharge. Most vendors who raise hardware prices do so on top of their existing margin structure, meaning they capture more gross dollars on every unit sold as costs rise. Salient’s surcharge passes through only the documented cost increase with no markup applied. The dollars Salient makes on a hardware sale are the same as they were on January 1. Your customers are not subsidizing anyone’s margin expansion.
- You are actively managing the project timeline to protect the customer’s budget. That means staying ahead of quote expiration dates and flagging risks before they become surprises, not after.
Customers who receive this kind of explanation, particularly when it comes proactively from their integrator, typically gain confidence rather than lose it. It positions the integrator as someone who is watching out for them in a market environment that is genuinely harder to navigate than it was two or three years ago.
Planning Through the Rest of 2026
The key milestone to track for active projects is the 30-day quote validity window on any hardware pricing you have received. Beyond individual quotes, integrators should build regular pricing check-ins into their pipeline management process, particularly for projects currently in active quoting stages.
The broader expectation should be that hardware pricing variability is a feature of the market environment for the foreseeable future, not an anomaly that will resolve quickly. Vendors who cannot clearly explain how their pricing increases are calculated, or what would cause them to come down, are not well-positioned to be long-term partners through what is ahead.
At Salient, we are committed to being as transparent as possible with our channel partners about how our surcharge policy works, how it is calculated, and what would cause it to change. Surcharge details are available to partners and their customers on request. If you have questions about how the current surcharge applies to your pipeline, reach out to your Salient account representative.
