IDC and GTDC: IT Distribution Revenues Remain Under Pressure

Published On: February 11, 2024Categories: Buzz

IT distributor revenue declined 6.2% year over year to $20.6 billion in the fourth quarter of 2023, according to IDC. This marked the fifth consecutive quarter of year-over-year revenue decline coming after nine quarters of growth that followed the beginning of the COVID pandemic in early 2020. During this period, enterprise spending, including software/services and networking, has seen consistent growth. Consumer categories, meanwhile, enjoyed a surge during the pandemic but have recently been declining from pandemic highs.

“Recovery and repercussions of the pandemic continue to impact the IT distribution market going into 2024,” said Ruth Flynn, research vice president of IDC’s Tracker & Data Products. “From macro conditions like stabilizing inflation to the drivers of technology spending in enterprise and slow consumer markets we continue to see the market adapting to the pandemic disruption. Despite the difficult current environment, we expect overall IT distribution spending to see growth later in the year, and to see much stronger growth from some categories and vendors.”

While December 2023 sales came in a bit soft, software sales through distribution for the quarter grew 1.1% year over year to $4.27 billion. Over 50% of software sales through distribution were for System Infrastructure Software.

After five consecutive quarters of double-digit year-over-year growth, the Network Infrastructure product group has cooled off to just to just 1.7% year-over-year growth as pandemic backlogs have been cleared. The quarter closed with $2.37 billion in sales with Ethernet Switches still showing year-over-year growth of 9.5% but Wireless LAN contracted significantly with a 30% year-over-year decline in revenues.

IDC’s North America Weekly Distribution Tracker and North America Monthly Distribution Tracker are based on a partnership between IDC and the Global Technology Distribution Council (GTDC) leveraging sales data collected weekly from large North American distributors. This data is mapped to more than 200 product categories.

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