What changed at Cisco between August and October?
In August, Cisco’s pricing story was simple. Memory costs had exploded, so hardware got more expensive. Price increases added about 5 points to the company’s 18% revenue growth in fiscal Q4 2026, and Trefis’s read of the earnings call was that management applied them to hardware, not software, and treated them as “a last resort.”
On November 7, Cisco raises list prices again. This time, according to Channel Insider’s summary of CRN’s reporting, most of the increases target networking and security software, averaging in the mid-single-digit percentage range. A limited set of hardware also goes up. Splunk is excluded. Product-level prices went into Cisco’s list price catalog and SalesConnect on October 24, and they take effect in Cisco Commerce Workspace on November 7. That leaves buyers less than two weeks.
Software has no DRAM in it. That matters more than the percentage.
A cost passthrough became a pricing precedent
Cisco’s channel chief, Tim Coogan, described the change as an effort “to align pricing with market conditions and continued investment in innovation.” That is a different justification from the one Cisco used in February, when CEO Chuck Robbins told analysts the company had raised hardware prices to cover memory and was “revising contractual terms with channel partners and customers to address evolving component prices,” as The Register reported. The April round followed the same script: list price changes from April 18, “focused primarily on compute hardware” and tied to “ongoing volatility in the memory market,” per Cisco partner Cisilion.
The same call contains the line that explains October. CFO Mark Patterson said he hadn’t “talked to any customers that are really willing to delay or defer any sort of strategic investments” because of memory prices. Customers absorbed the first increase without changing behavior. A vendor that learns its demand is price-inelastic does not stay disciplined about only raising prices where its costs rose.
This is the pattern to watch across your whole vendor list, not just Cisco. The memory shortage gave hardware vendors a credible, documented reason to reprice. The 2027 budget pressure from memflation is real on servers, PCs and storage. But once buyers accept “market conditions” as a reason, the same language shows up on renewals for products whose cost of goods didn’t move. Cisco is simply the first large vendor to make the shift visible on a dated price list.
Cisco also expects price to keep doing work for it. Trefis reports management guided to a comparable 4 to 5 points of price-driven growth in fiscal 2027. Some of that is annualization of earlier increases, but it tells you which direction the next renewal conversation will run.
What to do before November 7
The window is short, so the list is short.
- Pull every open Cisco quote and check the expiration date. Cisco says its standard price protection policies stay in place, but Channel Insider notes partners must confirm how protection applies to each transaction. Do not assume a quote dated before October 24 is honored. Ask your partner, in writing, which quotes are protected and until when.
- Accelerate only what is already approved. If a purchase or renewal is budgeted and signed off for Q4 or Q1, closing it before November 7 is a clean saving of a few percent. Pulling forward unapproved spend to “beat the increase” is how a 5% price change becomes a 100% budget overrun on that line.
- Separate the software lines from the hardware lines. Ask your partner for the line-level delta on your installed base, split by software subscription and hardware. The hardware increase has a cost story you can verify against memory pricing. The software increase does not, and that is where your leverage is.
- Check your renewal notice windows. Security and networking subscriptions often auto-renew. If one renews in the next 90 days at the new list price, now is the time to open the conversation, not the week before. The renewal-first approach to contract negotiation applies directly here.
Where the leverage actually sits
Final customer prices still depend on negotiated discounts, contracts and price protection, so a list increase is not automatically your increase. Three arguments carry weight with a vendor that is repricing software on “market conditions”:
Ask for the cost basis. If the vendor justified hardware increases with component costs, ask what component cost justifies the software increase. There usually isn’t one, and the question reframes the discussion from inevitable passthrough to discretionary margin.
Trade term for a cap. A multi-year software commitment in exchange for a renewal cap at or below inflation turns a recurring annual surprise into a known number. It answers the same renewal-driven price creep that keeps SaaS bills rising, applied to infrastructure software.
Make the alternative credible. Networking and security are crowded markets. A competitive quote on one product family, even one you are unlikely to switch, reminds an account team that “customers don’t defer” was a statement about the memory increase, not a permanent law.
The broader point for finance teams: 2026 taught technology vendors that cost-driven price increases stick. Expect the hardware passthrough that started with memory to keep turning into general repricing through 2027. When a vendor raises prices, the first question is whether its costs actually rose on the product you’re buying. If they didn’t, you have room to negotiate.